Canada tax sumury 2012

1

This booklet is intended to provide useful information to assist businesses in Canada taxation and new harmonized sales tax (HST) in British Columbia, and does not replace federal or provincial legislation and accompanying regulations. It is strictly intended for reference purposes. As it may not completely address your particular operation, you may wish to consult the appropriate legislation or contact: • Canada Revenue Agency at 1-800-959-5525 or www.cra-arc.gc.ca • B.C. Ministry of Finance at 1-877-388-4440 or www.gov.bc.ca/fin/

2

Canada at a glance Units Scale 2000 2004 2007 2008 2010 2011 2012 2013 2014 2015

National currency Billions 1,100.52 1,211.24 1,311.26 1,320.29 1,324.99 1,352.56 1,378.33 1,412.87 1,447.58 1,482.15 Index 97.825 106.577 116.65 121.444 122.613 126.287 128.741 131.506 134.295 137.104 National currency Units 35,127.84 40,466.77 46,516.19 48,204.16 47,699.29 49,676.46 51,187.92 53,169.99 55,226.78 57,207.63 Current international dollar Billions 888.552 1,065.76 1,263.63 1,300.55 1,334.14 1,391.11 1,432.61 1,477.94 1,527.17 1,582.35 Percent of GDP 20.23 20.723 23.241 23.238 22.204 23.25 24.011 24.17 24.227 24.177 Percent of GDP 23.623 23.036 24.077 23.569 19.072 19.916 20.196 20.655 21.042 21.596 Index 95.383 104.633 111.45 114.108 116.475 119.858 122.338 124.78 127.26 129.821 Percent change 8.172 16.342 11.852 2.143 25.541 13.394 4.507 3.674 3.707 3.544 Percent change 8.645 16.826 11.452 1.964 26.439 13.698 4.445 3.845 4.083 3.976 Percent change 9.207 13.285 7.032 -4.629 18.649 9.563 3.677 4.759 4.959 5.084 Percent of GDP 43.533 40.589 40.741 39.661 38.261 38.037 38.683 39.532 39.999 40.604 Percent of GDP 40.588 39.726 39.158 39.535 43.815 42.304 41.876 41.441 41.047 40.808 Percent of GDP 46.227 35.213 22.917 22.306 32.224 34.916 36.802 37.056 36.465 35.088 Percent of GDP 82.127 72.601 66.518 71.114 83.953 84.117 84.163 82.287 79.694 76.444 Percent of GDP 2.719 2.311 0.835 0.329 -3.131 -3.334 -3.814 -3.515 -3.185 -2.58

3

Welcome to the City of Vancouver Bordered by the Coast Mountain Range and the Pacific Ocean, Vancouver is recognized as one of the world's most livable cities. Archaeological evidence shows that the Coast Salish people had settled the Vancouver area by 500 BC. The City of Vancouver is renowned for its innovative programs in the areas of sustainability, accessibility and inclusivity. In 2010, Vancouver will host the world at the 2010 Olympic and Paralympics Winter Games.

Facts about Vancouver Population/ Climate Vancouver is the eighth largest city in Canada with a population of 578,000 (2006 census) and has one of the mildest climates in Canada with temperatures averaging around 3 degrees Celsius in January and 18 degrees Celsius in July. It covers 114.7 sq km (44.3 sq miles), and is part of Metro Vancouver, the third largest metropolitan area in Canada, with a population of 2.1 million (2006 census). Business/ Economy Vancouver has Canada's largest and most diversified port, trading $75 billion in goods annually. It is home to a variety of different industries, including the mining, forest, biotech, film and software industries.

4

History Archaeological evidence shows that the Coast Salish people had settled the Vancouver area by 500 BC. In the 1870s, Vancouver was founded as a sawmill settlement called Granville. And in 1886, the city was incorporated and renamed Vancouver after Captain George Vancouver, a British naval captain who explored the area in 1792. Source: http://vancouver.ca/aboutvan.htm

Canada at a Glance Population Table:

1995 2005 2010 2011 Year number

Canada 29,302,311 32,245,209 34,605,346 34,605,346

Newfoundland and Labrador 567,397 514,363 511,272 511,272

Prince Edward Island 134,415 138,055 146,152 146,152

Nova Scotia 928,120 937,941 946,378 946,378

New Brunswick 750,943 747,960 755,810 755,810

Quebec 7,219,219 7,581,911 8,002,098 8,002,098

Ontario 10,950,119 12,528,480 13,422,912 13,422,912

Manitoba 1,129,150 1,178,301 1,254,658 1,254,658

Saskatchewan 1,014,187 993,579 1,063,535 1,063,535

Alberta 2,734,519 3,322,200 3,798,791 3,798,791

British Columbia 3,777,390 4,196,788 4,592,034 4,592,034

Yukon 30,442 31,904 34,891 34,891

Northwest Territories 41,432 43,399 43,485 43,485

Nunavut 24,978 30,328

33,330 33,330

Source: Statistics Canada, CANSIM table 051-0005.

5

Canadian federal marginal tax rates of taxable income 1998-2012 $0 - $10,527 $10,527 - $42,707 $42,707- $85,414 $85,414-132,406

$128,800 over $132,406

2012 0% %15 %22 %22 %29

$0 - $10,527 $10,527 - $41,544 $41,544 - $83,088 $81,941 $128,800 over $128,800 2011

0% %15 %22 %22 %29

$0 - $10,382 $10,382 - $40,970 $40,970 - $81,941 $81,941 $127,021 over $127,021 2010

0% %15 %22 %22 %29

$0 - $10,320 $10,321 - $40,726 $40,727 - $81,452 $81,453 - $126,264 over $126,264 2009 0% 15% 22% 26% 29%

$0 - $9,600 $9,601 - $37,885 $37,886 - $75,769 $75,770 - $123,184 over $123,184 2008

0% 15% 22% 26% 29%

$0 - $9,600 $9,600 - $37,178 $37,178 - $74,357 $74,357 - $120,887 over $120,887 2007

0% 15% 22% 26% 29%

$0 - $8,839 $8,839 - $36,378 $36,378 - $72,756 $72,756 - $118,285 over $118,285 2006

0% 15.25% 22% 26% 29%

$0 - $8,648 $8,648 - $35,595 $35,595 - $71,190 $71,190 - $115,739 over $115,739 2005

0% 15% 22% 26% 29%

$0 - $8,012 $8,012 - $35,000 $35,000 - $70,000 $70,000 - $113,804 over $113,804 2004

0% 16% 22% 26% 29%

$0 - $7,756 $7,756 - $32,183 $32,183 - $64,368 $64,368 - $104,648 over $104,648 2003

0% 16% 22% 26% 29%

$0 - $7,634 $7,634 - $31,677 $31,677 - $63,354 $63,354 - $103,000 over $103,000 2002

0% 16% 22% 26% 29%

$0 - $7,412 $7,412 - $30,754 $30,754 - $61,509 $61,509 - $100,000 over $100,000 2001

0% 16% 22% 26% 29%

$0 - $7,231 $7,231 - $30,004 $30,004 - $60,009 over $60,009 2000

0% 17% 25% 29%

$0 - $6,794 $6,794 - $29,590 $29,590 - $59,180 over $59,180 1999

0% 17% 26% 29%

$0 - $6,794 $6,794 - $29,590 $29,590 - $59,180 over $59,180 1998

0% 17% 26% 29%

Income not taxed The following types of income are not taxed in Canada (this list is not exhaustive):

gifts and inheritances; lottery winnings;

6

Goods & Services Tax The federal government's sales tax is a value-added tax. Harmonized Sales Tax The Harmonized Sales Tax (HST) is used in certain provinces to combine the federal Goods and Services Tax (GST) and the Provincial Sales Tax (PST) into a single, blended, sales tax. Currently, there is a 13% HST in the provinces of New Brunswick, Newfoundland, and Nova Scotia. The HST is collected by the Canada Revenue Agency, which then remits the appropriate amounts to the participating provinces. Like the GST, the HST is value-added. Effective July 1, 2010 British Columbia and Ontario will adopt HST replacing their current PST at 12% and 13% respectively.

Annual revenue from taxable sales $1.5M or less: report annually

More than $1.5M up to $6M: report quarterlyMore than $6M: report monthly

If you wish to change your reporting period, perhaps because your business uses accounting periods that are not monthly or quarterly, you must notify the Canada Revenue Agency. Provincial Sales Taxes Separate Provincial Sales Taxes (PST) are collected in the provinces of British Columbia, Saskatchewan, Manitoba, Ontario, Quebec (called QST for Quebec Sales Tax, in French TVQ, Taxes des Ventes du Québec), and Prince Edward Island. Goods to which the tax is applied varies by province, as does the rate. Moreover, for those provinces whose provincial sales tax is applied to the combined cost and GST, provincial revenues decline or increase with respective changes in the GST. Of the provincial sales taxes, only the QST (and the HST) are value-added; the rest are cascading taxes.

7

Province Rate

(%) Combined fed./prov. rate (%) Note

British Columbia 7 12

• food, fuel, children's sized clothes and footwear as well as some other items and service are exempted (see Sales taxes in British Columbia for more detail) • Alcohol is taxed at 10%. • Passenger vehicles are taxed at between 7% to 10% based on purchase price. • Harmonized Sales Tax takes effect on July 1, 2010.

Alberta 0 5 • Alberta has no provincial sales tax. There is a 4% tax on lodging.

Saskatchewan 5 10 • Reduced from 7% on 28 October 2006 • There is a separate 10% liquor consumption tax. The non-alcoholic portion of a restaurant meal is not taxed.

Manitoba 7 12

Ontario 8 13

• PST is usually 8%, but is 5% on lodging, 10% on entertainment and alcohol at restaurants and 12% on alcohol at retail stores on top of the flat LCBO liquor mark-ups. • Harmonized Sales Tax takes effect on July 1, 2010.

Quebec 7.5 12.875 • Provincial rate is nominally 7.5%, but also applied to federal 5% GST. Effectively 7.875%

Prince Edward Island 10 15.5 • Provincial rate is nominally 10%, but also applied to

federal 5% GST. Effectively 10.5%

New Brunswick 13 Nova Scotia 13 Newfoundland and Labrador 13

• Harmonized Sales Tax includes provincial tax and GST

GST/HST rates The GST is a tax that applies on most supplies of goods and services made in Canada. The GST also applies to supplies of real property (for example, land, buildings and interests in such property) and intangible property such as trademarks, rights to use a patent, and digitized products downloaded from the Internet and paid for individually. The participating provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador) harmonized their provincial sales tax with the GST to implement the HST. Generally, the HST applies to the same base of goods and services as the GST. As of July 1, 2010, Ontario harmonized its retail sales tax with the GST to implement the HST and British Columbia harmonized its provincial sales tax with the GST to implement the HST. Also, as of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%. For information see Nova Scotia HST rate increase.

8

In Quebec, Revenue Québec administers the GST/HST. If your business is located in Quebec, visit the Revenu Québec Web site. The HST breakdown: • The HST rate of 12% includes the 5% federal part and 7% provincial part. • The HST rate of 13% includes the 5% federal part and 8% provincial part. • The HST rate of 15%* includes the 5% federal part and 10% provincial part.

(As of July 1, 2010) • The HST rate of 14% includes the 6% federal part and 8% provincial part.

The HST rate of 15% includes the 7% federal part and 8% provincial part.

GST/HST Rates

Provincial On or after July 1, 2010

On or after January 1, 2008, and

before July 1, 2010

Before January 1, 2008, and

after June 30, 2006

On or after April 1, 1997,

and before July 1, 2006

Before April 1,

1997

Alberta 5% 5% 6% 7% 7%

British Columbia 12% 5% 6% 7% 7%

Manitoba 5% 5% 6% 7% 7%

New Brunswick 13% 13% 14% 15% 7%

Newfoundland and Labrador 13% 13% 14% 15% 7%

Northwest Territories 5% 5% 6% 7% 7%

Nova Scotia 15%* 13% 14% 15% 7%

Nunavut 5% 5% 6% 7% 7%

Ontario 13% 5% 6% 7% 7%

Prince Edward Island 5% 5% 6% 7% 7%

Saskatchewan 5% 5% 6% 7% 7%

Yukon 5% 5% 6% 7% 7%

9

Non-Refundable Tax Credit Blocks BC / 2000-2012

Base Amount Credit

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Personal Credits

Subject to Indexing

Basic Personal Amount $7,231 $8,000 $8,168 $8,307 $8,523 $8,676 $8,858 $9,027 $9,189 $9,373 $11,000 $11,088 $11,355 yes

Spousal $6,140 $6,850 $6,994 $7,113 $7,298 $7,429 $7,585 $7,729 $7,868 $8,026 $9,653 $9,730 $9,964 yes

Reduced when spousal income exceeds ($614) ($685) ($699) ($711) ($730) ($743) ($759) ($773) ($787) ($803) ($965) $ (973) ($996)

Eligible Dependant $6,140 $6,850 $6,994 $7,113 $7,298 $7,429 $7,585 $7,729 $7,868 $8,026 $9,653 $9,730 $9,964 yes

Reduced when dependant income exceeds ($614) ($685) ($699) ($711) ($730) ($743) ($759) ($773) ($787) ($803) ($965) $(973) ($996)

Infirm Dependant Credit $2,386 $2,424 $3,574 $3,635 $3,730 $3,797 $3,876 $3,949 $4,021 $4,101 $4,118 $4,151 $4,250 yes

Reduced when dependant income exceeds ($11,661) ($5,576) ($5,693) ($5,790) ($5,940) ($6,047) ($6,174) ($6,292) ($6,405) ($6,533) ($6,559) $(6,611) ($6,770)

In-home care of relative $2,386 $2,424 $3,574 $3,634 $3,730 $3,796 $3,877 $3,949 $4,021 $4,101 $4,118 $4,150 $4,250 yes

Reduced when relative's income exceeds ($4,845) ($11,848) ($12,096) ($12,302) ($12,621) ($12,849) ($13,118) ($13,368) ($13,608) ($13,881) ($13,936) ($14,048) ($12,385)

Age (65 or older by end of taxation year) $3,531 $3,587 $3,663 $3,725 $3,822 $3,891 $3,972 $4,048 $4,121 $4,203 $4,220 $4,254 $4.250 yes

Reduced when income exceeds ($26,284) ($26,705) ($27,265) ($27,729) ($28,450) ($28,962) ($29,570) ($30,132) ($30,674) $(31,664) ($32,424

Pension Credit $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 no

Adoption Expense Credit Based on actual adoption expenses to a maximum of '1' (based on federal indexed maximum amount)

- - - - - - - Actual Actual Actual Actual Actual Actual no

Charitable and other gifts

Lowest tax rate on first $200; highest tax rate on excess Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual no

Medical Expense Credit Reduced by lesser of '2' or 3% of net income

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual yes

Credit for Mental or Physical Impairment $4,293 $4,362 $6,126 $6,230 $6,392 $6,507 $6,644 $6,770 $6,892 $7,030 $7,058 $7,114 $7,285 yes Credit for Mental or Physical Impairment for child under 18 $2,941 $2,988 $3,574 $3,635 $3,729 $3,796 $3,876 $3,950 $4,021 $4,101 $4,118 $4,151 $4,250 yes

Reduced by attendant care and child care expenses in excess of '3' claimed in respect of the impaired child $2,000 $2,032 $2,075 $2,110 $2,165 $2,204 $2,250 $2,293 $2,334 $2,381 $2,391 $2,410 $2,468

Tuition Credit Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual no

Education

Full-time student $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200 $200

Part-time student $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60 $60 no

Student Loan Interest Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual no

EI and CPP Credit Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual no

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 - - - - - - - $10,445 $10,643 $10,909 $10,975 $11,128 11,4402 $1,637 $1,633 $1,698 $1,727 $1,772 $1,804 $1,842 $1,877 $1,911 $1,949 $1,957 $1,972 $2,0203 $2,000 $2,032 $2,075 $2,110 $2,165 $2,204 $2,250 $2,293 $2,334 $2,381 $2,391 $2,410 $2,468

10

Tax Credits - Low Income Climate Action Tax Credit Effective July 2008, individuals may be eligible for the B.C. refundable Low Income Climate Action Tax Credit. You are eligible for the Low Income Climate Action Tax Credit if you are a resident of British Columbia, and

• you are 19 years of age or older or • you have a spouse or common-law partner or • you are a parent who resides with your child

For payments commencing in 2008 the maximum credit is $100 for yourself, $100 for your spouse or common-law partner and $30 for each qualified dependant. If you are a single parent the maximum credit is $100 for yourself, $100 for your first child and $30 for each additional child. For payments starting in July 2009 and July 2010 the maximum credits are increased to $105 and $31.50. For payments starting July 2011 the maximum credits are increased to $115.50 and $34.50 The Low Income Climate Action Tax Credit is reduced by 2% of net family income over the income threshold. The income thresholds are indexed to the Consumer Price Index for British Columbia.

Tax Year Payment Dates Net Income Threshold Single

Net Income Threshold Married or Single Parent

2012 For July 2011 to June 2012 $30,968 $36,130 2011 For July 2010 to June 2011 $30,722 $35,843 2010 For July 2009 to June 2010 $30,600 $35,700 2009 For July 2008 to June 2009 $30,000 $35,000

Claiming the Credit The tax credit will be paid quarterly together with the federal Goods and Services Tax Credit in July, October, January and April. You cannot claim this credit if you were confined to a prison or similar institution for a period of at least 90 days that includes the first day of that quarter.

11

Comparison indexation adjustment for personal income tax and benefit amounts Each year, certain personal income tax and benefit amounts are indexed to inflation using the Consumer Price Index data as reported by Statistics Canada. Increases to tax bracket thresholds, amounts relating to non-refundable credits, and most other amounts will take effect on January 1, 2010. However, increases to the Canada Child Tax Benefit (including the National Child Benefit Supplement and the Child Disability Benefit) and the goods and services tax credit will take effect on July 1, 2010, to coincide with the beginning of the program year for payment of these benefits. The following chart compares the indexed amounts for the 2009-2012 tax years. It reflects an indexation increase of 0.6% for 2010.

Year 2012 ($) 2011 ($) 2010 ($) 2009 ($)

Tax bracket thresholds

Taxable income above which the 22% bracket begins 42,707 41,544 40,970 40,726



Amounts relating to non-refundable tax credits

Basic personal amount 10,882 10,527 10,382 10,320

Age amount 6,720 6,537 6,446 6,408

Net income threshold 33,884 32,961 32,506 32,312

Spouse or common-law partner amount (max.) 10,822 10,527 10,382 10,320

Amount for an eligible dependant (max.) 12,822 10,527 10,382 10,320

Amount for children under age 18 (max. per child) 2,191 2,131 2,101 2,089

Canada employment amount (max.) 1,095 1,065 1,051 1,044

Infirm dependant amount (max. per dependant) 6,402 4,282 4,223 4,198


Caregiver amount (max. per dependant) 4,402 4,282 4,223 4,198


Disability amount 7,546 7,341 7,239 7,196

Supplement for children with disabilities (max.) 4,402 4,282 4,223 4,198

Threshold relating to allowable child care and attendant care expenses 2,578 2,508 2,473 2,459

Adoption expenses (max. per adoption) 11,440 11,128 10,975 10,909

Medical expense tax credit—3% of net income ceiling 2,109 2,052 2,024 2,011

Refundable medical expense supplement

Maximum supplement 1,119 1,089 1,074 1,067

Minimum earnings threshold 3,268 3,179 3,135 3,116

Family net income threshold 24,783 24,108 23,775 23,633

Old Age Security repayment threshold 69,562 67,668 66,733 66,335

Certain board and lodging allowances paid to players on sports teams or members of recreation programs

Income exclusion (max. per month) 329 320 315 313

12

Year 2012 ($) 2011 ($) 2010 ($) 2009 ($)

Tradesperson’s tools deduction

Threshold amount relating to cost of eligible tools 1,095 1,065 1,051 1,044

Goods and services tax credit

Adult maximum 260 253 250 248

Child maximum 137 133 131 130

Single supplement 137 133 131 130

Phase-in threshold for the single supplement 8,439 8,209 8,096 8,047

Family net income at which credit begins to phase out 33,884 32,961 32,506 32,312

Canada Child Tax Benefit

Base benefit 1,405 1,367 1,348 1,340

Additional benefit for third child 98 95 94 93

Family net income at which base benefit begins to phase out 42,707 41,544 40,970 40,726

National Child Benefit (NCB) supplement

First child 2,177 2,118 2,088 2,076

Second child 1,926 1,873 1,848 1,837

Third child 1,832 1,782 1,758 1,747

Family net income at which NCB supplement begins to phase out 24,863 24,183 23,855 23,710

Family net income at which NCB supplement phase-out is complete 42,707 41,544 40,970 40,726

Canada Disability Benefit (CDB)

Maximum benefit 2,575 2,504 2,470 2,455

Family net income at which CDB supplement begins to phase out 42,707 41,544 40,970 40,726

Children’s Special Allowances (CSA)

CSA Base Amount 3,582 3,485 3,436 3,416

13

Indexation adjustment for personal income tax and benefit amounts / 2005-2012 2005

($)

2006

($)

2007

($)

2008

($)

2009

($)

2010

($)

2011

($)

2012

($)

Taxable income above which the 22% bracket begins 35,595 36,378 37,178 37,885 40,726 40,970 41,544 42,707



Amounts relating to non-refundable tax credit

Basic personal amount 8,648 9,039 9,600 9,600 10,320 10,382 10,527 10,822

Age amount 3,979 4,066 5,177 5,276 6,408 6,446 6,537 6,720

Net income threshold 29,619 30,270 30,936 31,524 32,312 32,506 32,961 33,884

Spouse or common-law partner amount (max.) 7,344 7,675 9,600 9,600 10,320 10,382 10,527 10,822

Amount for an eligible dependant (max.) - 7,505 9,600 9,600 10,320 10,382 10,527 12,822

Amount for children under age 18 (max. per child) - - 2,000 2,038 2,089 2,101 2,131 2,191

Canada employment amount (max.) - - 1,000 1,019 1,044 1,051 1,065 1,095

Infirm dependant amount (max. per dependant) 3,848 3,933 4,019 4,095 4,198 4,223 4,282 6,402


Caregiver amount (max. per dependant) 3,848 3,933 4,019 4,095 4,198 4,223 4,282 4,402


Disability amount 6,596 6,741 6,890 7,021 7,196 7,239 7,341 7,546

Supplement for children with disabilities (max.) 3,848 3,933 4,019 4,095 4,198 4,223 4,282 4,402

Threshold relating to allowable child care and attendant care expenses 2,254 2,303 2,354 2,399 2,459 2,473 2,508 2,578

Adoption expenses (max. per adoption) 10,000 10,220 10,445 10,643 10,909 10,975 11,128 11,440

Medical expense tax credit—3% of net income ceiling 1,844 1,884 1,926 1,962 2,011 2,024 2,052 2,109

Certain board & loading

Maximum supplement 750 1,000 1,022 1,041 1,067 1,074 1,089 1,119

Minimum earnings threshold 2,857 2,919 2,984 3,040 3,116 3,135 3,179 3,268

Family net income threshold 21,663 22,140 22,627 23,057 23,633 23,775 24,108 24,783

Old Age Security repayment threshold 60,806 62,144 63,511 64,718 66,335 66,733 67,668 69,562

Income exclusion (max. per month) - - - - 313 315 320 329

Threshold amount relating to cost of eligible tools - - - - 1,044 1,051 1,065 1,095

Adult maximum 227 232 237 242 248 250 253 260

Child maximum 120 122 125 127 130 131 133 137

Single supplement 120 122 125 127 130 131 133 137

Phase-in threshold for the single supplement 7,377 7,539 7,705 7,851 8,047 8,096 8,209 8,439

Family net income at which credit begins to phase out 29,618 30,270 30,936 31,524 32,312 32,506 32,961 33,884

Base benefit 1,228 1,255 1,283 1,307 1,340 1,348 1,367 405

Additional benefit for third child 86 88 90 91 93 94 95 98

Additional benefit for children under 7 years 243 249 - - - - - -

Family net income at which base benefit begins to phase out 35,595 36,378 37,178 37,885 40,726 40,970 41,544 42,707

First child 1,722 1,945 1,988 2,025 2,076 2,088 2,118 2,177

Second child 1,502 1,720 1,758 1,792 1,837 1,848 1,873 1,926

Third child 1,420 1,637 1,673 1,704 1,747 1,758 1,782 1,832

Family net income at which NCB supplement begins to phase out - - 20,883 21,287 23,710 23,855 24,183 24,863

Family net income at which NCB supplement phase-out is complete 35,595 36,378 37,178 37,885 40,726 40,970 41,544 42,707

Maximum benefit 2,000 2,300 2,351 2,395 2,455 2,470 2,504 2,575

Family net income at which CDB supplement begins to phase out 35,595 36,378 37,178 37,885 40,726 40,970 41,544 42,707

CSA Base Amount - - 3,271 3,332 3,416 3,436 3,485 3,582

14

Canadian Pension Plan (CPP) Since January 1, 2012, you may have to deduct CPP contributions from the pensionable earnings you pay an employee who is 60 to 70 years of age, even if the employee is receiving a CPP or QPP retirement pension. Under the new rules, an employee who works and receives a CPP or QPP retirement pension now has to contribute to the CPP if he or she is: • 60 to 65 years of age; • 65 to 70 years of age, unless the employee has filed an election with you or another employer to stop paying CPP contributions (the election will take effect on the first day of the month following the month the employee provides you with a completed and signed election form); • 65 to 70 years of age, if the employee revoked his or her election to stop paying CPP contributions in 2013 or later. Notes These legislative amendments do not affect the salary or wages of an employee who is considered to be disabled under the CPP or QPP, nor do they affect the salary and wages of a person who has reached 70 years of age. Do not deduct CPP contributions from the salary and wages that you pay these employees. Employees working in Quebec and other workers not subject to the CPP are not affected by these changes. You have to deduct CPP contributions from an employee who is employed in pensionable employment and is receiving pensionable earnings, and meets one of these conditions: • Who is currently receiving a CPP or QPP retirement pension and is 60 to 65 years of age, even if it means deducting from someone who was not contributing in a previous year because he or she was receiving a CPP/QPP retirement pension; OR • Who is currently receiving a CPP or QPP retirement pension and is 65 to 70 years of age, and who has not given you a copy of a signed and completed Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. Note The CRA can assess you for failing to deduct CPP contributions or for failing to remit the CPP contributions to the CRA as required. The assessment may also include penalty and interest charges. For more information, go to Penalties, interest, and other consequences.

15

Canada Pension Plan Payment Rates

Type of benefit Average benefit

(September 2010)

Maximum monthly benefit (2011)

Disability benefit $810.46 $1,153.37

Retirement pension (at age 65) $504.50 $960.00

Survivors benefit (under age 65) $364.85 $529.09

Survivors benefit (age 65 and over) $297.72 $576.00

Children of disabled contributors benefit $214.85 $218.50

Children of deceased contributors benefit $214.85 $218.50

Combined survivors & retirement benefit (pension at age 65) $682.21 $960.00

Combined survivors & disability benefit $940.78 $1,153.37

Death benefit $2,252.93

Maximum one-time payment $2,500.00

EI premium rates and maximums

Rate (%) Max. Annual Employee Premium

Max. Annual Employer Premium

Year Max. Annual Insurable Earnings

Federal Quebec Federal Quebec Federal Quebec

2012 $45,900 1.83 1.47 $839.97 $674.96 $1,176.96 $944.62

2011 $44,200 1.78 1.41 $786.76 $623.22 $1,101.46 $872.51

2010 $43,200 1.73 1.36 $747.36 $587.52 $1,046.30 $822.53

2009 $42,300 1.73 1.38 $731.79 $583.74 $1,024.51 $817.24

2008 $41,100 1.73 1.39 $711.03 $571.29 $995.44 $799.81

2007 $40,000 1.80 1.46 $720.00 $584.00 $1,008.00 $817.60

2006 $39,000 1.87 1.53 $729.30 $596.70 $1,021.02 $835.38

2005 $39,000 1.95 N/A $760.50 N/A $1,064.70 N/A

2004 $39,000 1.98 N/A $772.20 N/A $1,081.08 N/A

2003 $39,000 2.10 N/A $819.00 N/A $1,146.60 N/A

2002 $39,000 2.20 N/A $858.00 N/A $1,201.20 N/A

2001 $39,000 2.25 N/A $877.50 N/A $1,228.50 N/A

2000 $39,000 2.40 N/A $936.00 N/A $1,310.49 N/A

1999 $39,000 2.55 N/A $994.50 N/A $1,392.30 N/A

1998 $39,000 2.70 N/A $1,053.00 N/A $1,474.20 N/A

1997 $39,000 2.90 N/A $1,131.00 N/A $1,583.40 N/A

Important Note Quebec offers its own parental benefits. For more information, visit the Revenu Québec site.

16

CPP contribution rates, maximums and exemptions 1997-2012 Year Max. Annual Pensionable

Earnings Basic

Exemption Maximum Contributory

Earnings Employee Contribution

Rate (%) Max. Annual Employee

Contribution Max. Annual Self -

Employed Contribution

2012 $50,100 $3,500 $46,600 4.95 $2,306.70 $4,613.40 2011 $48,300 $3,500 $44,800 4.95 $2,217.60 $4,435.20 2010 $47,200 $3,500 $43,700 4.95 $2,163.15 $4,326.30 2009 $46,300 $3,500 $42,800 4.95 $2,118.60 $4,237.20 2008 $44,900 $3,500 $41,400 4.95 $2,049.30 $4,098.60 2007 $43,700 $3,500 $40,200 4.95 $1,989.90 $3,979.80 2006 $42,100 $3,500 $38,600 4.95 $1,910.70 $3,821.40 2005 $41,100 $3,500 $37,600 4.95 $1,861.20 $3,722.40 2004 $40,500 $3,500 $37,000 4.95 $1,831.50 $3,663.00 2003 $39,900 $3,500 $36,400 4.95 $1,801.80 $3,603.60 2002 $39,100 $3,500 $35,600 4.70 $1,673.20 $3,346.40 2001 $38,300 $3,500 $34,800 4.30 $1,496.40 $2,992.80 2000 $37,600 $3,500 $34,100 3.90 $1,329.90 $2,373.00 1999 $37,400 $3,500 $33,900 3.50 $1,186.50 $2,373.00 1998 $36,900 $3,500 $33,400 3.20 $1,068.80 $2,137.60 1997 $35,800 $3,500 $32,300 2.925* $944.78 $1,889.55

17

Basic exemption chart Employee's CPP basic exemption for various 2012 pay periods.

Pay period Basic exemption

Annually (1) $3,500.00

Semi-annually (2) $1,750.00

Quarterly (4) $875.00

Monthly (12) $291.66

Semi-monthly (24) $145.83

Bi-weekly (26) $134.61

Bi-weekly (27) $129.62

Weekly (52) $67.30

Weekly (53) $66.03

22 pay periods $159.09



Daily (240) $14.58

Hourly (2000) $1.75 * For 1997, the CPP rate was adjusted to 3.0% with a payment on filing the T1 tax return max.

18

EI premium rate and maximum Each year, CRA provide the maximum insurable earnings and rate for employer to calculate the amount of EI to deduct from your employees. Employer has to deduct EI premiums from insurable earnings their pay to their employees. In addition, employer must pay 1.4 times the amount of the employee's premiums. Employer may qualify to reduce your 1.4 times employer contribution if employer provides their employees a short-term disability plan. Example

EI premiums you deducted from your employees for the month $195.50

Your share of EI ($195.50 × 1.4 ) $273.70

Total amount you remit for EI premiums $469.20

You stop deducting EI premiums when you reach the employee's maximum insurable earnings ($45,900 for 2012) or the maximum employee premium for the year ($839.97 for 2012). The maximum for Quebec is $647.73 for 2012. Note The annual maximum insurable earnings ($45,900 for 2012) applies to each job the employee holds with different employers (different business numbers). If an employee leaves one employer during the year to start work with another employer, the new employer also has to deduct EI premiums without taking into account what was paid by the previous employer. This is the case even if the employee has paid the maximum premium amount during the previous employment. CRA will credit or refund any overpayments to employees when they file their income tax and benefit return. There is no provision that provides a credit or refund to the employer in such circumstances. Note Different EI rates apply for employees working in Quebec as a result of the establishment of the Quebec Parental Insurance Plan (QPIP). Old Age Security (OAS) Payment Rates- January - March 2011 The following chart shows the maximum and average monthly rates for Old Age Security (OAS), Guaranteed Income Supplement and the Allowance, as well as the maximum annual income to be eligible for these benefits. For detailed monthly rates, please refer to the Tables of Rates for Old Age Security, Guaranteed Income Supplement and the Allowance. Old Age Security benefit rates are reviewed in January, April, July and October to reflect increases in the cost of living as measured by the Consumer Price Index.

19

The term "spouse" includes a common-law partner. Pensioners are not eligible for benefits if their income, or the combined income of them and their spouse, is more than the maximum income shown on the chart. Canada Pension Plan - Payment Rates Jan - Dec 2012 Canada Pension Plan (CPP) rates are adjusted every January if there are increases in the cost of living as measured by the Consumer Price Index (CPI). The table below lists the maximum and average monthly rates for CPP benefits, except for the death benefit which is a one-time payment.

Canada Pension Plan Payment Rates

Type of benefit Average benefit (October 2011)

Maximum amount (2012)

Retirement (at age 65) $512.64 $986.67

Disability $820.96 $1,185.50

Survivor – younger than 65 $383.56 $543.82

Survivor – 65 and older $301.15 $592.00

Children of disabled contributors $218.50 $224.62

Children of deceased contributors $218.50 $224.62

Death (maximum one-time payment) $2,276.62 $2,500.00

Combined benefits

Survivor/retirement (retirement at 65) $701.46 $986.67

Survivor/disability $949.22 $1,185.50

Meal and vehicle rates used to calculate travel expenses for 2012 Meal expenses If you choose the detailed method to calculate meal expenses, you must keep your receipts and claim the actual amount that you spent. If you choose the simplified method, you may claim a flat rate of $17/meal, to a maximum of $51/day (Canadian or US funds) per person. Although you do not need to keep detailed receipts for actual expenses if you choose to use this method, we may still ask you to provide some documentation to support your claim.

20

Meal expenses Prior table of simplified method 2001-2012 Year $ Meal per person $ Maximum Per day 2012 17 51

2011 17 51 2010 17 51 2009 17 51 2008 17 51 2007 11 33 2006 15 45 2005 15 45 2004 15 45 2003 15 45 2002 11 33 2001 17 51

Vehicle expenses If you choose the detailed method to calculate vehicle expenses, you must keep all receipts and records for the vehicle expenses you incurred for moving expenses or for northern residents deductions during the tax year; or during the 12-month period you choose for medical expenses. Vehicle expenses include: • Operating expenses such as fuel, oil, tires, licence fees, insurance,

maintenance, and repairs. • Ownership expenses such as depreciation, provincial tax, and finance

charges. You also have to keep track of the number of kilometers you drove in that time period, as well as the number of kilometers you drove specifically for the purpose of moving or medical expenses, or for the northern residents deductions. Your claim for vehicle expenses is the percentage of your total vehicle expenses that relate to the kilometers driven for moving or medical expenses, or for northern residents deductions. For example, if you drove 10,000 km during the year, and half of that was related to your move, you can claim half of the total vehicle expenses on your tax return. Although you do not need to keep detailed receipts for actual expenses if you choose to use the simplified method, we may still ask you to provide some documentation to support your claim. You must keep track of the number of kilometers driven during the tax year for your trips relating to northern residents deductions and moving expenses, or the 12-month period you choose for medical expenses. To determine the amount you can claim for vehicle expenses, multiply the number of kilometers by the cents/km rate from the chart below for the province or territory in which the travel begins.

21

Motor vehicle leasing costs - employees You can deduct amounts you paid to lease a motor vehicle you used to earn employment income. Include the leasing costs you paid when you calculate your allowable motor vehicle expenses. If you use a passenger vehicle to earn employment income, there is a limit on the amount of the leasing costs you can deduct. If you leased a passenger vehicle before January 1, 2001, you will need to refer to the applicable chart in the 2008 version of the Guide T4044, Employment expenses to assist you in calculating the eligible leasing costs. You can use the Chart, Eligible leasing costs for passenger vehicles leased after December 31, 2000 to calculate your eligible leasing costs for a passenger vehicle leased after 2000 as follow: Chart - Eligible leasing costs for passenger vehicles leased after December 31, 2000

1. Enter the total lease charges paid for the vehicle in 2011 $________

2. Enter the total lease payments deducted for the vehicle before 2011 $________

3. Enter the total number of days the vehicle was leased in 2011 and previous years $________

4. Enter the manufacturer's list price $________

5. $35,294 + GST and PST, or HST on $35,294 $________

6. Enter the amount from line 4 or line 5, whichever is more

$______ × 85% $________

7. ($800 + GST and PST, or HST on $800) × line 3 =

$______ ÷ 30 =

$______ − line 2 $________

8. ($30,000 + GST and PST, or HST on $30,000) × line 1 =

$______ ÷ line 6 $________

Your eligible leasing cost is the lower of the amounts on line 7 and line 8.

22

Comparison table of Vehicle expenses 2001-2012

Example In 2011, you provided your employee with an automobile. She drove 30,000 kilometres during the year, with 10,000 kilometres for personal use. You paid $3,000 in costs associated with maintenance, licenses, and insurance. Calculate the part of the operating expenses that relates to her personal use of the automobile as follows: 10,000 km ÷ 30,000 km × $3,000 = $1,000 If she reimbursed you for the total amount of $1,000 in the year or no later than 45 days after the end of the year, you do not have to calculate an operating expense benefit for her. However, if she reimbursed you for only $800 of the expenses you paid in the year or no later than 45 days after the end of the year, the operating expense benefit is $1,600, calculated as follows: 10,000 km × 24¢ = $2,400 $2,400 - $800 = $1,600 Flat-rate allowance If you pay your employee an allowance based on a flat rate that is not related to the number of kilometers driven, it is a taxable benefit and has to be included in the employee's income. Combination of flat-rate and reasonable per-kilometre allowances If you pay your employee an allowance that is a combination of flat-rate and reasonable per-kilometre allowances that cover the same use for the vehicle, the total combined allowance is a taxable benefit and has to be included in the employee's income. Example 1 You pay an allowance to your employee as follows:

Province or territory 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Alberta 53 53 51.5 51.5 53 48 47.5 45.5 43.5 41.5 39.5 39.5 British Columbia 52 52 52 52 54 48 47.5 45.5 43 41.5 42 42 Manitoba 49 49 47.5 49 50.5 46.5 45.5 44 40.5 40.5 41.5 41 New Brunswick 52 52 49.5 50 52 47 47.5 45.5 43.5 44 41.5 42 Newfoundland and Labrador 55 55 53 53.5 55.5 50.5 50.5 49 47.5 45 43.5 43.5 Northwest Territories 61.5 61.5 58 58 64 56.5 54.5 52.5 49 48.5 48.5 47 Nova Scotia 53 53 51 50 52.5 48 47.5 46 44 44 41.5 42 Nunavut 61.5 61.5 58 58 64 56.5 54.5 52.5 49 48.5 48.5 47 Ontario 57 57 55 54 55.5 49.5 48.5 47 45.5 43.5 43.5 42.5 Prince Edward Island 52 52 50 50 52.5 47 47.5 45.5 44 42 40.5 41 Quebec 59 59 56.5 57 58 52.5 51.5 50 47.5 46 45 46 Saskatchewan 47.5 47.5 46 47.5 49.5 46 44.5 43 40 39 40 38.5 Yukon 63.5 63.5 60.5 61 66 58 57 55 50.5 48.5 48 48.5

23

• a flat per-diem rate to offset the employee's fixed expenses for each day the vehicle is required; and

• A reasonable per-kilometer rate for each kilometre driven to offset the operating expenses. The flat per-diem rate compensates the employee for some of the “same use” on which the reasonable per-kilometre allowance is based, that is, the fixed expenses incurred by the employee to operate the vehicle. The combined amount is considered one allowance and therefore taxable, since it is not based solely on the number of kilometres the vehicle is used for employment purposes. Example 2 You pay an allowance to your employee as follows:

• a flat-rate per month for travel inside the employment district; and • a reasonable per-kilometre rate for employment-related travel outside the

employment district. Since the flat-rate allowance does not cover any of the same use of the vehicle on which the reasonable per-kilometre allowance is based, the allowances are considered separately. The reasonable per-kilometer allowance paid for travel outside the district is not included in income. The amount based on a flat-rate paid for travel inside the district is taxable, since it is not based solely on the number of kilometres for which the vehicle is used in connection with the employment. Only the total of the monthly flat-rate allowance has to be reported in box 14, “Employment income”, and in the “Other information” area under code 40 at the bottom of the employee's T4 slip. Example of calculating the taxable benefit Farzaneh is your employee. He borrowed $150,000 from you at the beginning of the year. The prescribed rate of interest for the loan is 3% for the first quarter, 4% for the second and third quarters, and 5% for the fourth quarter. Farzaneh paid you $2,000 interest on the loan no later than 30 days after the end of the year. During the year, a company related to you paid $1,000 interest on the loan for Farzaneh. Before the end of the same year, Farzaneh repaid the $1,000 to the company.

24

Calculate the benefit to include in his income as follows: 1) Prescribed rate × loan amount for the year:

3% × $150,000 × 1/4 = $1,125 4% × $150,000 × 2/4 = $3,000 5% × $150,000 × 1/4 = $1,875 $6,000

Plus 2) Amount paid by a third party 1,000

$7,000Minus 3) Interest paid ($2,000 + $1,000) = ($3,000) 4) Amount Joshua repaid (1,000) (4,000)Farzaneh's taxable benefit $3,000

Prescribed Interest Rates for Leasing Rules Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

January 6.66 6.55 6.24 5.87 5.20 5.03 5.22 5.00 4.84 4.60 3.61

February 6.75 6.37 6.14 5.86 5.04 5.11 5.18 4.45 5.08 4.51 3.42

March 6.72 6.45 6.15 5.69 5.22 5.23 5.17 4.74 4.92 4.71

April 6.68 6.39 5.98 5.71 5.17 5.10 5.14 4.70 4.98 4.69

May 7.00 6.52 5.94 5.75 5.26 5.21 4.91 4.63 4.99 4.66

June 6.89 6.34 6.23 5.55 5.59 5.21 5.02 4.72 4.99 4.67

July 6.76 6.01 6.23 5.41 5.51 5.43 5.07 5.11 4.58 4.41

August 6.73 5.98 6.30 5.27 5.69 5.59 5.07 4.96 4.59 4.47

September 6.70 6.35 6.29 5.31 5.46 5.52 5.18 5.10 4.71 4.28

October 6.55 6.40 6.14 5.11 5.22 5.44 5.02 4.96 4.39 4.00

November 6.38 6.19 6.02 5.21 5.08 5.50 5.14 4.87 4.25 3.74

December 6.61 6.33 5.96 5.38 5.25 5.39 5.31 4.98 4.38 3.91

25

Comparison Federal Personal Income Tax Rates 2011 Marginal Tax Rates 2012 Marginal Tax Rates

Canadian Dividends Canadian Dividends 2012 Taxable Income Other

Income Capital Gains Eligible

DividendsNon-Eligible

Dividends

2011 Taxable Income Other Income

Capital Gains Eligible

Dividends Non-Eligible

Dividends

first $42,707 15.00% 7.50% -2.02% 2.08% first $41,544 15.00% 7.50% -3.03% 2.08%

over $42,707 up to $85,414 22.00% 11.00% 7.85% 10.83% over $41,544 up to $83,088 22.00% 11.00% 9.63% 10.83%


over $132,406 29.00% 14.50% 17.72% 19.58% over $128,800 29.00% 14.50% 19.29% 19.58%

Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).

Federal Basic Personal Amount

2012 Tax Rate 2011 Tax Rate

$10,822 15.00% $10,527 15.00%

Comparison Federal Personal Income Tax Rates

2010 Marginal Tax Rates 2009 Marginal Tax Rates

Canadian Dividends Canadian Dividends

2010 Taxable Income Other Income

Capital Gains

EligibleDividends

Small Business

Dividends

2009 Taxable Income OtherIncome

Capital Gains

Eligible Dividends

SmallBusiness

Dividends

first $40,970 15.00% 7.50% -4.28% 2.08% first $40,726 15.00% 7.50% -5.75% 2.08%



over $127,021 29.00% 14.50% 15.88% 19.58% over $126,264 29.00% 14.50% 14.55% 19.58%


Federal Basic Personal Amount

2010 Tax Rate 2009 Tax Rate

$10,382 15.00% $10,320 15.00%

Source: www. taxtip.ca

26

Canada Pension Plan (CPP) and Québec Pension Plan (QPP) contribution rates Year 2012 2011 2010 2009 2008 2007 2006 2005 2004

maximum pensionable earnings $50,100 $48,300 $47,200 $46,300 $44,900 $43,700 $42,100 $41,100 $40,500

basic exemption $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500

rate %4.95 4.95% 4.95% 4.95% 4.95% 4.95% 4.95% 4.95% 4.95%

employee/employer maximum $2,306.70 $2,217.60 $2,163.15 $2,118.60 $2,049.30 $1,989.90 $1,910.70 $1,861.20 $1,831.50

self-employed maximum $4,613.40 $4,435.20 $4,326.30 $4,237.20 $4,098.60 $3,979.80 $3,821.40 $3,722.40 $3,663.00

Source: www. taxtip.ca Canada Revenue Agency (CRA) information:

T4032 Payroll Deduction Tables - for calculating payroll deductions CPP contribution rates, maximums and exemptions for rates from earlier years. Online payroll calculator, which employers can use for calculating payroll

deductions, and employees can use to check their payroll deductions. Revenue Québec information:

Source deductions of Québec income tax - for calculating payroll deductions TP-1015.G-V - Guide for Employers: Source Deductions and Contributions

Federal & Provincial/Territorial enhanced dividend tax credit rates 2007 to 2012 Enhanced Dividend Tax Credit Rates as a % of Grossed-up Taxable Dividends

Year Gross up Federal AB BC MB NB NL NS NT NU ON PE QC SK YT

2012 38% 15.02% 10% 9.76% 11% 10.65% 8.65% 7.85% 10.20% 5.51% 6.4% 9.32% 11.9% 11% 9.76%

2011 41% 16.44% 10% 10.31% 11% 11.24% 9.14% 8.29% 10.78% 5.82% 6.4% 9.84% 11.9% 11% 10.31%

2010 44% 17.97% 10% 10.83% 11% 11.82% 9.60% 8.71% 11.32% 6.11% 6.4% 10.34% 11.9% 11% 10.83%

2009 45% 18.97% 10% 11% 11% 12% 9.75% 8.85% 11.5% 6.21% 7.4% 10.5% 11.9% 11% 11%

2008 45% 18.97% 9.0% 12% 11% 12% 6.65% 8.85% 11.5% 6.20% 7.0% 10.5% 11.9% 11% 11%

2007 45% 18.97% 8.0% 12% 11% 12% 6.65% 8.85% 11.5% 6.20% 6.7% 10.5% 11.9% 11% 11%

2007 to 2012 Enhanced Dividend Tax Credit Rates as a % of Actual Dividends

Year Gross up Federal AB BC MB NB NL NS NT NU ON PE QC SK YT

2012 38% 20.73% 13.8% 13.47% 15.18% 14.69% 11.94% 10.84% 14.08% 7.60% 8.83% 12.86% 16.42% 15.18% 13.47%

2011 41% 23.17% 14.1% 14.53% 15.51% 15.85% 12.88% 11.69% 15.19% 8.20% 9.02% 13.87% 16.78% 15.51% 14.53%

2010 44% 25.88% 14.4% 15.60% 15.84% 17.01% 13.82% 12.55% 16.30% 8.80% 9.22% 14.89% 17.14% 15.84% 15.60%

2009 45% 27.50% 14.5% 15.95% 15.95% 17.40% 14.14% 12.83% 16.68% 9.00% 10.73% 15.23% 17.26% 15.95% 15.95%

2008 45% 27.50% 13.05% 17.40% 15.95% 17.40% 9.64% 12.83% 16.68% 8.99% 10.15% 15.23% 17.26% 15.95% 15.95%

2007 45% 27.50% 11.60% 17.40% 15.95% 17.40% 9.64% 12.83% 16.68% 8.99% 9.72% 15.23% 17.26% 15.95% 15.95%

Rates are as known at December 22, 2009. (Source: taxtip.ca)

27

Rates for Money Purchase limits, RRSP limits, YMPE, DPSP limits and Defined Benefits limits Outlined in the following tables are data on Rates for Money Purchase limits, RRSP limits, YMPE, DPSP limits and Defined Benefits limits used to calculate PA, PSPA and PAR.

Rates for Money Purchase limits, RRSP limits, YMPE, DPSP limits and Defined Benefits limits Outlined in the following tables are data on Rates for Money Purchase limits, RRSP limits, YMPE, DPSP limits and Defined Benefits limits used to calculate PA, PSPA and PAR.

Year MP limit RRSP $ limit YMPE DPSP limit (1/2 MP limit)

1990 $11,500 (Old limits) $28,900 $5,750

1991 $12,500 $11,500 $30,500 $6,250

1992 $12,500 $12,500 $32,200 $6,250

1993 $13,500 $12,500 $33,400 $6,750

1994 $14,500 $13,500 $34,400 $7,250

1995 $15,500 $14,500 $34,900 $7,750

1996 $13,500 $13,500 $35,400 $6,750

1997 $13,500 $13,500 $35,800 $6,750

1998 $13,500 $13,500 $36,900 $6,750

1999 $13,500 $13,500 $37,400 $6,750

2000 $13,500 $13,500 $37,600 $6,750

2001 $13,500 $13,500 $38,300 $6,750

2002 $13,500 $13,500 $39,100 $6,750

2003 $15,500 $14,500 $39,900 $7,750

2004 $16,500 $15,500 $40,500 $8,250

2005 $18,000 $16,500 $41,100 $9,000

2006 $19,000 $18,000 $42,100 $9,500

2007 $20,000 $19,000 $43,700 $10,000

2008 $21,000 $20,000 $44,900 $10,500

2009 $22,000 $21,000 $46,300 $11,000

2010 $22,450 $22,000 $47,200 $11,225

2011 $22,970 $22,450 $48,300 $11,485

2012 $23,820 $22,970 $50,100 $11,910

2013 $23,820

28

Please note that the MP limit and DPSP limit above for PA purposes are also restricted to 18% of compensation.

Defined Benefit limits

1990 to 2003 $1,722.22

2004 $1,833.33

2005 $2,000.00

2006 $2,111.11

2007 $2,222.22

2008 $2,333.33

2009 $2,444.44

2010 $2,494.44

2011 $2,552.22

2012 $2,646.67

2013 1/9 the money purchase limit

What are the income tax rates in Canada for 2012? These are the rates that an individual will use when completing their 2012 income tax and benefit return. The information may change during the year to reflect updates to the law.

• Federal tax rates for 2012 • Provincial/territorial tax rates for 2012

Federal tax rates for 2012

• 15% on the first $42,707 of taxable income, + • 22% on the next $42,707 of taxable income (on the portion of taxable

income over $42,707 up to $85,414), + • 26% on the next $46,992 of taxable income (on the portion of taxable

income over $85,414 up to $132,406), + • 29% of taxable income over $132,406.

The chart below reproduces the first calculation that has to be made on page 2 of Schedule 1 of the tax package to calculate net federal tax. Page 1 is used to calculate federal non-refundable tax credits.

29

Federal tax on taxable income manual calculation chart

Use this column if your taxable income is $42,707 or less

Use this column if your taxable income is more than $42,707, but not more than $85,414

Use this column if your taxable income is more than $85,414, but not more than $132,406

Use this column if your taxable income is more than $132,406

Enter your taxable income from line 260 of your return

1

Base amount − 0 − 42,707 − 85,414 − 132,406 2

Line 1 minus line 2 (this amount cannot be negative)

= = = = 3

Federal tax rate × 15% × 22% × 26% × 29% 4

Multiply the amount on line 3 by the tax rate on line 4

= = = = 5

Tax on the amount from line 2

+ 0 + 6,406 + 15,802 + 28,020 6

Add lines 5 and 6 = = = = 7

Provincial/territorial tax rates for 2012 Under the current tax on income method, tax for all provinces (except Quebec) and territories is calculated the same way as federal tax. Form 428 is used to calculate this provincial or territorial tax. Provincial or territorial specific non-refundable tax credits are also calculated on Form 428. For complete details, see the provincial or territorial information and forms in your 2012 tax package.

30

Provincial/territorial tax rates (combined chart)

Provinces/territories Rate(s)

Newfoundland and Labrador

7.7% on the first $32,893 of taxable income, + 12.5% on the next $32,892, + 13.3% on the amount over $65,785

Prince Edward Island 9.8% on the first $31,984 of taxable income, + 13.8% on the next $31,985, + 16.7% on the amount over $63,969

Nova Scotia 8.79% on the first $29,590 of taxable income, + 14.95% on the next $29,590, + 16.67% on the next $33,820, + 17.5% on the next $57,000, + 21% on the amount over $150,000

New Brunswick 9.1% on the first $38,190 of taxable income, + 12.1% on the next $38,190, + 12.4% on the next $47,798, + 14.3% on the amount over $124,178

Quebec See Income tax rates (Revenu Québec Web site).

Ontario 5.05% on the first $39,020 of taxable income, + 9.15% on the next $39,023, + 11.16% on the amount over $78,043

Manitoba 10.8% on the first $31,000 of taxable income, + 12.75% on the next $36,000, + 17.4% on the amount over $67,000

Saskatchewan 11% on the first $42,065 of taxable income, + 13% on the next $78,120, + 15% on the amount over $120,185

Alberta 10% of taxable income

British Columbia 5.06% on the first $37,013 of taxable income, + 7.7% on the next $37,015, + 10.5% on the next $10,965, + 12.29% on the next $18,212, + 14.7% on the amount over $103,205

Yukon 7.04% on the first $42,707 of taxable income, + 9.68% on the next $42,707, + 11.44% on the next $46,992, + 12.76% on the amount over$132,406

Northwest Territories 5.9% on the first $38,679 of taxable income, + 8.6% on the next $38,681, + 12.2% on the next $48,411, + 14.05% on the amount over $125,771

Nunavut 4% on the first $40,721 of taxable income, + 7% on the next $40,721, + 9% on the next $50,964, + 11.5% on the amount over $132,406

31

British Columbia - Provincial corporation tax Federal rates The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement. For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%. For the other corporations, the net tax rate is decreased as follows: • 19% effective January 1, 2009 • 18% effective January 1, 2010 • 16.5% effective January 1, 2011 • 15% effective January 1, 2012 Provincial or territorial rates Generally, provinces and territories have two rates of income tax - a lower rate and a higher rate. Federal rates The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement. For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%. For the other corporations, the net tax rate is decreased as follows: • 19% effective January 1, 2009 • 18% effective January 1, 2010 • 16.5% effective January 1, 2011 • 15% effective January 1, 2012 Provincial or territorial rates Generally, provinces and territories have two rates of income tax - a lower rate and a higher rate. Lower rate-The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit. Higher rate-The higher rate applies to all other income. Provincial and territorial tax rates (except Quebec and Alberta) The following table shows the income tax rates for provinces and territories (except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA).

32

These rates are in effect on January 1, 2011, and may change during 2011. Province or territory Lower rate Higher rate

Newfoundland and Labrador 4% 14% Nova Scotia 4.5% 16% Prince Edward Island 1% 16% New Brunswick 5% 11%* Ontario 4.5% 12%** Manitoba nil 12% Saskatchewan 4.5%*** 12% British Columbia 2.5% 10% Yukon 4% 15% Northwest Territories 4% 11.5% Nunavut 4% 12%

* 10% effective July 1, 2011 ** 11.5% effective July 1, 2011 *** 2% effective July 1, 2011

Reporting the tax You can use Schedule 427, British Columbia Corporation Tax Calculation, to help you calculate your British Columbia tax before the application of credits. You do not have to file it with the return. See the schedule for more details. Generally, provinces and territories have two rates of income tax: the lower rate and the higher rate. The lower rate applies to either:

• The income eligible for the federal small business deduction; or • The income based on limits established by the particular province or

territory. The higher rate applies to all other income Corporation (Ronak) earned all of its income for 2010 from its permanent establishment in Newfoundland and Labrador. Corporation (Ronak) claimed the small business deduction when it calculated its federal tax payable. The income from active business carried on in Canada was $78,000. The Newfoundland and Labrador lower rate of tax is 4.5%. The higher rate of tax is 12%.

33

Dual tax rates Generally, provinces and territories have two rates of income tax: the lower rate and the higher rate. The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit. The higher rate applies to all other income. Example: Corporation (Ronak) earned all of its income for 2010 from its permanent establishment in Saskatchewan. Corporation X claimed the small business deduction when it calculated its federal tax payable. The income from active business carried on in Canada was $78,000. The Saskatchewan lower rate of tax is 4.5%. The higher rate of tax is 12%. Corporation (Ronak) calculates its Saskatchewan tax payable as follows:

Taxable income $90,000

Subtract amount taxed at lower rate: Least of lines 400, 405, 410, or 425 of the return, in the small business deduction calculation $78,000

Amount taxed at higher rate $12,000

Taxes payable at the lower rate: $78,000 × 4.5% = $ 3,510

Taxes payable at the higher rate: $12,000 × 12% = $ 1,440

Saskatchewan tax payable $ 4,950

When you allocate taxable income to more than one province or territory, you also have to allocate proportionally any income eligible for the federal small business deduction.

Example 2- Corporation (Amir) has permanent establishments in both Nova Scotia and the Yukon. Its tax year runs from September 1, 2009, to August 31, 2010. Corporation (Amir) claimed the small business deduction when it calculated its federal tax payable. The lower rate of tax for Nova Scotia is 5%, and the higher rate of tax is 16%. To calculate its Nova Scotia income tax, Corporation (Amir) does the following calculations:

34

Taxable income allocated to Nova Scotia (from Schedule 5) $60,000

Taxable income allocated to the Yukon (from Schedule 5) $30,000

Total taxable income earned in Canada $90,000

Least of lines 400, 405, 410, or 425 of the return, in the federal small business deduction calculation $78,000

Income eligible for the federal small business deduction attributed to Nova Scotia: ($60,000 ÷ $90,000) × $78,000 = $52,000

Taxable income earned in Nova Scotia $60,000

Subtract: Income eligible for the federal small business deduction attributed to Nova Scotia $52,000

Amount taxed at higher rate $ 8,000

Taxes payable at higher rate: $8,000 × 16% = $ 1,280

Taxes payable at lower rate: $52,000 × 5% = $ 2,600

Nova Scotia tax payable $ 3,880

To calculate its Yukon income tax payable, Corporation (Amir) would repeat the same steps, using the rates that apply. For a table that shows the income tax rates as of January 1, 2011.

For a table that shows the income tax rates as of January 1, 2010, for the provinces and territories that have corporate tax collection agreements with the federal government.

Tax Brackets Rate (%) Provincial Surtax Federal (note) $10,382 to $40,970 15.00 $40,970 to $81,941 22.00 $81,941 to $127,021 26.00 $127,021 and higher 29.00 British Columbia $11,000 to $35,859 5.06 $35,859 to $71,719 7.70 $71,719 to $82,342 10.50 $82,342 to $99,987 12.29 $99,987 and higher 14.70

35

British Columbia (BC) combined federal & provincial tax rates / 2004-2010

Marginal Tax Rates Canadian Dividends Taxable Income

Capital Gains Small Business Dividends Eligible Dividends Other Income

2006 2007 2008 2009 2010 2011 2012 2004-2005 2006 2007 2008-

2012 2007 2008 2009 2010-2012 2007 2008 2009 2010 2011 2012 2004-

2005 2006 2007 2008-2010

first $33,755

first $34,397

first $35,016

first $35,716

first $35,859

first $36,146

first $37,013 11.03% 10.65% 10.35% 10.03% 2.83% 2.03% 3.16% 4.16% (14.89%) (15.81%) (14.36%) (12.59%) (9.42%) (6.51%) 22.05% 21.30% 20.70% 20.06%

over $33,755 up to $36,378

over $34,397 up to $37,178

over $35,016 up to $37,885

over $35,716 up to $40,726

over $35,859 up to $40,970

over $36,146 up to $41,544

over $37,013 up to $42,707

12.58% 12.20% 11.83% 11.35% 6.52% 5.33% 6.46% 7.46% (10.61%) (11.99%) (10.54%) (8.79%) (5.70%) (2.87%) 25.15% 24.40% 23.65% 22.70%

over $36,378 up to $67,511

over $37,178 up to $68,794

over $37,885 up to $70,033

over $40,726 up to $71,433

over $40,970 up to $71,719

over $41,544 up to $72,293

over $42,707 up to $74,028

15.58% 15.58% 15.33% 14.85% 15.27% 14.08% 15.21% 16.21% (0.46%) (1.84%) (0.38%) 1.29% (4.17%) 6.79 31.15% 31.15% 30.65% 29.70%

over $67,511 up to $72,756

over $68,794 up to $74,357

over $70,033 up to $75,769

over $71,433 up to $81,452

over $71,719 up to $81,941

over $72,293 up to $83,001

over $74,028 up to $84,993

16.85% 16.85% 16.55% 16.25% 18.33% 17.58% 18.71% 19.71% 3.10% 2.23% 3.68% 5.32% 8.12% 10.65% 33.70% 33.70% 33.10% 32.50%

over $72,756 up to $77,511

over $74,357 up to $78,984

over $75,769 up to $80,406

over $81,452 up to $82,014

over $81,941 up to $82,342

over $83,001 up to $83,088

over $84,993 up to $85,414

18.85% 18.85% 18.55% 18.25% 23.33% 22.58% 23.71% 24.71% 8.90% 8.03% 9.48% 11.08% 10.64% 13.12% 37.70% 37.70% 37.10% 36.50%

over $77,511 up to $94,121

over $78,984 up to $95,909

over $80,406 up to $97,636

over $82,014 up to $99,588

over $82,342 up to $99,987

over $83,088 up to $100,787

over $85,414 up to $103,205

19.85% 19.85% 19.50% 19.15% 25.71% 24.82% 25.95% 26.95% 11.65% 10.62% 12.07% 13.66% 16.28% 18.64% 39.70% 39.70% 39.00% 38.29%

over $94,121 up to $118,285

over $95,909 up to $120,887

over $97,636 up to $123,184

over $99,588 up to $126,264

over $99,987 up to $127,021

over $100,787 up to $128,800

over $103,205 up to $132,406

20.35% 20.35% 20.35% 20.35% 27.83% 27.83% 28.96% 29.96% 14.11% 14.11% 15.56% 17.13% 19.68% 21.97% 40.70% 40.70% 40.70% 40.70%

over $118,285

over $120,887

over $123,184

over $126,264

over $127,021

over $128,800

over $132,406 21.85% 21.85% 21.85% 21.85% 31.58% 31.58% 32.71% 33.71% 18.46% 18.46% 19.91% 21.45% 23.91% 26.11% 43.70% 43.70% 43.70% 43.70%


BC Basic Personal Amount Tax Rate 2004 2005 2006 2007 2008 2009 2010 2011 2012 2004-2006 2007 2008-2012

$8,523 $8,676 $8,858 $9,027 $9,189 $9,373 $11,000 $11,088 $11,354 6.05% 5.70% 5.06%

Source: Dayarayan centre of tax research

36

Ontario (ON) combined federal & provincial tax rates including surtaxes / 2004-2010

Marginal Tax Rates

Canadian Dividends Taxable Income

Small Business Dividends Eligible Dividends

2006 2007 2008 2009 2010 2011 2012 Capital Gains

2004-2009 2007 2008 2009 2010 2011 2012

Other Income

2006 10.65% 2006 3.55% 2006 21.30%

2007-09 10.53% 2007 3.23% 2007-09 21.05% first $34,758 first $35,488 first $36,020 first $36,848 first $37,106 first $37,774 first $39,020

2010-2012 10.03% 2008-09 3.88%

(6.69%) (7.13%) (7.71%) (6.23%) (3.93%) (1.089%)

2010 20.05% 2004-05 12.58% 2004-05 8.36% 2004-05 25.15%

2006 12.20% 2006 7.42% 2006 24.40% over $34,758 up to $36,378

over $35,488 up to $37,178

over $36,020 up to $37,885

over $36,848 up to $40,726

over $37,106 up to $40,970

over $37,774 up to $41,543

over $39,020 up to $42,707

2007-12 12.08% 2007-09 7.11% (2.2%) (2.63%) (3.21%) (0.32%) 1.85% 3.77%

2007-10 24.15% over $36,378 up to $61,206

over $37,178 up to $62,485

over $37,885 up to $63,428

over $40,726 up to $64,882

over $40,970 up to $65,345

over $41,543 up to $66,514

over $42,707 up to $68,719 15.58% 15.86% 7.95% 7.52% 6.94% 9.76% 11.72% 13.43% 31.15%

over $61,206 up to $69,517

over $62,485 up to $70,976

over $63,428 up to $72,041

over $64,882 up to $73,698

over $65,345 up to $74,214

over $66,514 up to $75,550

over $68,719up to $78,043 16.49% 16.86% 8.66% 8.14% 7.44% 10.55% 12.5% 14.19% 32.98%

over $69,517 up to $72,102

over $70,976 up to $73,625

over $72,041 up to $74,720

over $73,698 up to $76,440

over $74,214 up to $76,986

over $75,550 up to $78,361

over $78,043 up to $80,963 17.70% 19.88% 12.16% 11.64% 10.94% 14.02% 15.90% 17.52% 35.39%

over $72,102 up to $72,756

over $73,625 up to $74,357

over $74,720 up to $75,769

over $76,440 up to $81,452

over $76,986 up to $81,941

over $78,361 up to $83,880

over $80,963 up to $85,414 19.70% 22.59% 14.49% 13.81% 12.91% 16.49% 18.32% 19.88% 39.41%

over $72,756 up to $118,285

over $74,357 up to $120,887

over $75,769 up to $123,184

over $81,452 up to $126,264

over $81,941 up to $127,021

over $83,880 up to $128,800

over $85,414 up to $132,406 21.70% 27.59% 20.29% 19.61% 18.71% 22.25% 23.96% 25.40% 43.41%

over $118,285 over $120,887 over $123,184 over $126,264 over $127,021 over $128,800 over $132,406 23.20% 31.34% 24.64% 23.96% 23.06% 26.57% 28.19% 29.54% 46.41%


ON Basic Personal Amount Tax Rate 2004 2005 2006 2007 2008 2009 2010 2011 2012 2004-2009 2010-12

$8,044 $8,196 $8,377 $8,553 $8,681 $8,881 $8,943 $9,104 $9,405 6.05% 5.05% Source: Dayarayan centre of tax research

37

Federal Income Tax Rates for Income Earned by a Canadian-Controlled Private Corporation (CCPC) 2009-2012

Small Business Income up to $400,000 Active Business Income between $400,000 and $500,000 General Active Business Income Investment Income

Description 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012

General corporate rate 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0

Federal abatement (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0)

28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0

Small business deduction (17.0) (17.0) (17.0) (17.0) (17.0) (17.0) (17.0) (17.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Rate reduction 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (1.3) (10.0) (11.5) (1.3) 0.0 0.0 0.0 0.0

Refundable tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.7 6.7 6.7 6.7

11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 28.0 28.0 28.0 15.0 34.7 34.7 34.7 34.7

Comparison of Canada Corporate income tax rates- Federal and BC –(2003-2012)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 General/M&P/Investment 24.12 22.12 22.12 22.12 22.12 19.50 19.00 18.00 16.50 15.00 Small business 13.12 13.12 13.12 13.12 13.12 11.00 11.00 11.00 11.00 11.00 Federal(1) Investment - CCPC 35.79 35.79 35.79 35.79 35.79 34.67 34.67 34.67 34.67 34.67 General/M&P/Investment 13.50 13.50 13.50/12.00 12.00 12.00 12.00/11.00 11.00 10.50 10.00 10.00 British Columbia(2) Small business 4.50 4.50 4.50 4.50 4.50 4.50/3.50/2.50 2.50 2.50 2.50 2.50

(1) Federal: The income limit for the purposes of the small business deduction (SBD limit) has been $300,000 since 2005. The May 2, 2006 federal budget provided for a rise in the SBD limit to $400,000 effective January 1, 2007. The January 27, 2009 federal budget provides for an increase in the SBD limit to $500,000, effective January 1, 2009. The business limit must be allocated between associated corporations. The SBD is reduced progressively on a straight-line basis for CCPCs when their taxable capital used in Canada varies between $10 million and $15 million.

(2) British Columbia: SBD limit: increased to $400,000 for taxation years ending after December 31, 2004. As announced in the February 19, 2008 budget, the General/M&P/Investment rate was reduced to 11% effective July 1, 2008, to 10.5% effective January 1, 2010 and to 10% effective January 1, 2011. In addition, the rate for small businesses was reduced to 3.5% effective July 1, 2008, to 3% effective January 1, 2010 and to 2.5% effective January 1, 2011. On October 23, 2008, the government brought down its Economic Update which proposed a further decrease in the rate for small businesses, from 3.5% to 2.5% effective December 1, 2008. The February 17, 2009 budget confirmed the previously announced rate reductions. In a news release dated April 7, 2009, the B. C. government announced that the SBD limit would be increased from $400,000 to $500,000 on January 1, 2010.

38

Comparison of Corporate Tax Rates 2003-2012 Federal British Columbia Top marginal rate

year General SBD M&P Investments

(CCPC) General/M&P SBD Capital Gain Dividends

Other Income

2003 24.12 13.12 22.12 35.79 13.50 4.50 21.85 31.58 43.70 2004 22.12 13.12 22.12 35.79 13.50 4.50 21.85 31.58 43.70 2005 22.12 13.12 22.12 35.79 13.50 4.50 21.85 31.58 43.70 2006 22.12 13.12 22.12 35.79 12.00 4.50 21.85 - 43.70 2007 22.12 13.12 22.12 35.79 12.00 4.50 18.47 31.58 43.70 2008 21.00 11.50 19.50 34.67 11.00 4.50 21.85 31.58 43.70 2009 19.50 11.00 19.00 34.67 12.00 3.50 21.85 32.71 43.70 2010 18.00 11.00 18.00 34.67 10.50 2.50 2011 16.50 11.00 16.50 34.67 10.00 2.50 2012 15.00 11.00 15 34.67 10.00 2.50

Federal SBD limite 2005($&300,000),2006($400,000) and 2009 ( $500,000) BC –SBD Limite 2005 ($400,000) and 2009 and after ( $500,000) Deferred Income Plans - Maximum Contributions

Year RRSP(1) RPP(2) 1995 $14,500 $15,500

1996-2002 $13,500 $13,500 2003 $14,500 $15,500 2004 $15,500 $16,500 2005 $16,500 $18,000 2006 $18,000 $19,000 2007 $19,000 $20,000 2008 $20,000 $21,000 2009 $21,000 $22,000 2010 $22,000 $22,450 2011 $22,450 $22,970 2012 $22,970 indexed

(1) RRSP: Registered Retirement Savings Plan (2) RPP: Registered Pension Plan

39

Table of Canadian Federal Tax Rates for the years 2003- 2012 Portion 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1st portion of taxable income $32,183 $35,000 $35,595 $36,378 $37,178 $37,885 $40,726 $40,970 $41,544 $42,707 Applicable Rate 16.00% 16.00% 15.00% 15.25% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% Next portion of taxable income $32,185 $35,000 $35,595 $36,378 $37,179 $37,884 $40,726 $40,971 $41,535 $42,706 Applicable Rate 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% Next portion of taxable income $40,280 $43,804 $44,549 $45,529 $46,530 $47,415 $44,812 $45,080 $45,791 $46,992 Applicable Rate 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% On the amount over $104,648 $113,804 $115,739 $118,285 $120,887 $123,184 $126,264 $127,021 $128,800 $132,406 Applicable Rate 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00%


Table of Individual Income Tax Rates for the Province of British Columbia / 2003- 2012

Portion 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1st portion of taxable income $31,653 $32,476 $33,061 $33,755 $34,397 $35,016 $35,716 $35,859 $36,146 $37,013 Applicable Rate 6.05% 6.05% 6.05% 6.05% 5.70% 5.06% 5.06% 5.06% 5.06% 5,06 Next portion of taxable income $31,655 $32,478 $33,062 $33,756 $34,397 $35,017 $35,717 $35,860 $36,147 $37,015 Applicable Rate 9.15% 9.15% 9.15% 9.15% 8.65% 7.70% 7.70% 7.70% 7.70% 7.70% Next portion of taxable income $9,377 $9,621 $9,794 $10,000 $10,190 $10,373 $10,581 $10,623 $10,707 $10,965 Applicable Rate 11.70% 11.70% 11.70% 11.70% 11.10% 10.50% 10.50% 10.50% 10.50% 10.50% Next portion of taxable income $15,575 $15,980 $16,268 $16,610 $16,925 $17,230 $17,574 $17645 $17,786 $18,212 Applicable Rate 13.70% 13.70% 13.70% 13.70% 13.00% 12.29% 12.29% 12.29% 12.29% 12.29% On the amount over $88,260 $90,555 $92,185 $94,121 $95,909 $97,636 $99,588 $99,987 $100,787 $103,205 Applicable Rate 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% Source: Dayarayan centre of tax research

40

BC Combined Federal and Provincial Income Tax Rates for Income Earned by a Canadian-Controlled Private Corporation(CCPC)

Effective date Small Business Income up to $400,000

Active Business Income between $400,000 and $500,000

General Active Business Income

Investment Income

01-Jan-08 15.5/14.5/13.5% - 31.5/30.5% 46.7/45.7% 01-Jan-09 13.50% 22.00% 30.00% 45.70% 01-Jan-10 13.50% 21.50% 28.50% 45.20% 01-Jan-11 13.50% 21.00% 26.50% 26.50% 01-Jan-12 15% 25% 25% 25%

BC Provincial Income Tax Rates for Income Earned by a Canadian-Controlled Private Corporation(CCPC)

Effective date Small Business Income up to $400,000

Active Business Income between $400,000 and $500,000

General Active Business Income

Investment Income

01-Jan-08 4.5/3.5/2.5% - 12/11% 12/11% 01-Jan-09 2.50% 11% 11% 11% 01-Jan-10 2.50% 10.50% 10.50% 10.50% 01-Jan-11 2.50% 10% 10% 10% 01-Jan-12 2.50% 10% 10% 10%

Small Business Income (SBI) Thresholds for Canadian-Controlled Private Corporations (CCPCs) 2008-2012

Description 2008 2009 2010 2011-2012 Federal $400,000 $500,000 $500,000 $500,000 British Columbia $400,000 $400,000 $400,000 $500,000

41

Federal Personal Income Tax Rates / 2004-2012

Marginal Tax Rates

Canadian Dividends Taxable Income Capital Gains Small Business

Dividends Eligible Dividends Other Income

2005 2006 2007 2008 2009 2010 2011 2012 2004 2005-2012 2004 2005-2012 2005-

2006 2007-2009 2010 2011 2012 2004 2005-2012

first $35,595 first $36,378 first $37,178 first $37,885 first $40,726 first $40,970 First $41,544 First $427.7 8.00% 7.50% 3.33% 2.08% 2.08% (5.75%) (4.28%) (2.02%) (0.03) 16% 15.00%

over $35,595 up to $71,190

over $36,378 up to $72,756

over $37,178 up to $74,357

over $37,885 up to $75,769

over $40,726 up to $81,452

over $40,970 up to $81,941

Over 41,544 to 83,088

Over 427,7to 85,414

11.00% 11.00% 10.83% 10.83% 10.83% 4.40% 5.80% 7.78% 9.65 22% 22.00%

over $71,190 up to $115,739

over $72,756 up to $118,285

over $74,357 up to $120,887

over $75,769 up to $123,184

over $81,452 up to $126,264

over $81,941 up to $127,021

Over 83,088 to 128,800

Over 85,414 to 132,406

13.00% 13.00% 15.83% 15.83% 15.83% 10.20% 11.56% 13.49% 15.15 26% 26.00%

over $115,739 over $118,285 over $120,887 over $123,184 over $126,264 over $127,021 Over 128,800 Over 132,406 14.50% 14.50% 19.58% 19.58% 19.58% 14.55% 15.88% 17.72% 19.29 29% 29.00%

Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount). Federal Basic Personal Amount Tax Rate

2004 2005 2006 2007 2008 2009 2010 2011 2012 2004 2005 & 2012 2006 $8,012 $8,648 $9,039 $9,600 $9,600 $10,320 $10,382 $10,527 $10,822 16.00% 15.00% 15.25%


42

Total Average Household Expenditure By Province Year 2007 2008 2009

Canada 69,950 71,360 71,120

Newfoundland and Labrador 55,010 57,710 57,600

Prince Edward Island 55,570 58,710 56,900

Nova Scotia 59,990 60,330 60,870

New Brunswick 58,210 58,440 61,210

Quebec 57,310 60,480 60,120

Ontario 76,650 77,310 76,580

Manitoba 63,300 63,510 66,610

Saskatchewan 63,940 68,280 69,380

Alberta 85,910 86,910 84,980

British Columbia 72,620 73,120 73,570

Average total expenditure and shares of spending of major categories for provinces and territories, 2009

Average

household spending

Food Shelter Clothing Transportation Personal taxes1

$ Shares of spending2 (%) Canada 71,120 10.2 19.8 4.0 13.7 20.2 Newfoundland and Labrador 57,600 11.3 16.6 4.3 16.0 18.5 Prince Edward Island 56,900 11.8 19.5 3.7 14.0 16.8 Nova Scotia 60,870 11.0 18.9 3.6 14.6 18.2 New Brunswick 61,210 10.9 17.4 3.7 15.8 17.5 Quebec 60,120 12.0 18.8 3.9 13.9 19.9 Ontario 76,580 9.5 20.3 4.1 13.4 21.1 Manitoba 66,610 9.8 18.3 3.9 14.3 20.2 Saskatchewan 69,380 9.1 17.9 3.8 15.9 19.4 Alberta 84,980 9.2 19.0 4.0 14.0 22.2 British Columbia 73,570 10.3 22.2 3.9 12.7 17.9 Yukon 69,860 10.7 19.9 3.7 12.8 18.5 Northwest Territories 82,970 11.5 21.5 3.9 12.2 21.3 Nunavut 84,440 17.5 15.2 5.0 7.5 18.7 1. Percentage of spending on personal taxes depends on provincial and federal income tax rates as well as 2. Shares of spending represent the proportions of average household spending.

43

What's Taxable under the HST and What's Not in British Columbia?1 AROUND THE HOUSE GST-taxable

before July, 2010

PST-taxable before July

1,2010

Is there a change to the amount of tax payable

the HST? Cleaning Products 5% 7% No (remains 12%) Laundry Detergent, Fabric Softeners 5% 7% No (remains 12%) Household Furniture 5% 7% No (remains 12%) Household Appliances (Refrigerators, Stoves, Washers, Dryers, Freezers, Dishwashers)

5% 7% No (remains 12%)

Pre-packaged Computer Software 5% 7%2 No (remains 12%) Books (Including Audio Books) 5% No PST No (remains 5%) Newspapers 5% No PST Yes (changes to 12%) Certain School Supplies 5% No PST Yes (changes to 12%) Magazines 5% No PST Yes (changes to 12%) Office Supplies and Stationery 5% 7% No (remains 12%) Landscaping Material (Sod, Topsoil, Rockery)


Linens (e.g., Blankets, Towels, Sheets)


Tens, Sleeping Bags, Camping Equipment


Tools 5% 7% No (remains 12%) Patio Furniture 5% 7% No (remains 12%) Rugs and Mats 5% 7% No (remains 12%) Works of Art, Vases, and Carvings 5% 7% No (remains 12%) Sewing Machines 5% 7% No (remains 12%) Vacuum Cleaners 5% 7% No (remains 12%) Barbeques, Lawnmowers, Snow Blowers, Sprinklers


Toys (e.g., Puzzles, Games, Action Figures, Dolls, Playsets)


Outdoor Play Equipment (e.g., Swing Sets, Sandboxes, Slides)


Arts and Craft Supplies (e.g., Glue, Paper, etc)

5% 7% No (remains 12%

Building Materials (e.g., Lumber, Concrete Mix, Nails)

5% 7% No (remains 12%

Energy Star Windows 5% No PST3 Yes (changes to 12%) Thermal Insulation, Weather Stripping and Caulking

5% NoPST Yes (changes to 12%)

Exterior and Interior Paint 5% 7% No (remains 12%) Kitchen Utensils 5% 7% No (remains 12%) Cookware 5% 7% No (remains 12%) First Aid Kits 5% No PST Yes (changes to 12%) Smoke Detectors Valued less Than $2502 for Residential Use

5% No PST Yes (changes to 12%)

Other Smoke Detectors 5% 7% No (remains 12%)

1- Assumes sales by GST/HST registrants that are not non-profit organization or registered charities, unless otherwise specified. 2 - The Energy Star exemption for residential refrigerators, freezers and clothes washers ended on March 31, 2010. All major household

appliances are now subject to PST. 3 - Exemption was scheduled to expire April 2011.

44

AROUND THE HOUSE GST-taxable before July,

2010


1,2010


the HST? Household Pets (Including Pet Food)


House Plants, Cut Flowers, and Outdoor Ornamental Plants


Food Producing Plants and Trees (e.g., Tomato Plants, Plum Tree)


Household Moving Services 5% No PST Yes (changes to 12%) CLOTHING, FOOTWEAR AND ACCESSORIES

GST-taxable before July,

2010

PST-taxable before

July 1,2010


the HST? Adult Clothing and Footwear 5% 7% No (remains 12%) Children Sized Clothing and Footwear

5% No PST No (remains 5%)

Adult Sized Clothing for Children 5% No PST Yes (changes to 12%) Children's Cloth Diapers 5% No PST No (remains 5%)4 Children's Disposable Diapers 5% 7% Yes (drops to 5%)5 Shoe Repair 5% No PST Yes (changes to 12%) Tailoring Services 5% No PST Yes (changes to 12%) Dry Cleaning 5% No PST Yes (changes to 12%) Formal Wear Rentals 5% 7% No (remains 12%) Used Adult Clothing Purchased for Less Than $100

5% No PST Yes (changes to 12%)6

Watches 5% 7% No (remains 12%) Jeweller 5% 7% No (remains 12%) Handbags and Purses 5% 7% No (remains 12%) Backpacks 5% 7% No (remains 12%) Shoe Insoles and Laces 5% 7% No (remains 12%) Sunglasses (Non-prescription) 5% 7% No (remains 12%) Scarves 5% 7% No (remains 12%) Umbrellas 5% 7% No (remains 12%) Belts 5% 7% No (remains 12%) FOOD AND BEVERAGES GST-taxable

before July, 2010

PST-taxable before

July 1,2010


the HST? Basic Groceries (e.g., Dairy, Meat, Vegetables, Canned Goods)

No GST No PST No HST

Snack Foods (e.g., Chips, Pop) 5% No PST Yes (changes to 12%) Restaurant Meals 5% No PST Yes (changes to 12%) Alcoholic Beverages 5% 10% Yes (drops to 12%)7

4 - For Further detail see http://www.cra-arc.gc.ca/E/pub/gi/gi-063-e.pdf. 5 - For Further detail see http://www.cra-arc.gc.ca/E/pub/gi/gi-063-e.pdf. 6 - All sales used or donated goods mode by a registered charity are exempt from HST. 7 - Although the provincial sales tax rate on liquor is decreasing from 10% to 7% liquor mark-ups are adjusted with the implementation of

the HST to generally keep the Liquor Distribution Branch shelf prices constant..

45


2010


1,2010


the HST? Catering and Event Planning Services (e.g., planning, consulting, coordinating and organizing)

5% No PST8 Yes (changes to 12%)9

HOME SERVESES GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Basic Cable Television 5% No PST Yes (changes to 12%) Additional or Specialty Cable Television or Satellite Television


Cell Phone 5% 7% No (remains 12%) Municipal Water No GST No PST No HST Home Maintenance Equipment (e.g., Lawn Mowers, Mops)


Local Residential Phone 5% No PST Yes (changes to 12%) Long Distance Telephone Services 5% 7% No (remains 12%) Repair to Certain Household Appliances (e.g., Stoves, Ovens, Refrigerators, Washers, and Dryers)


Repair to Household Electronics (e.g., Televisions and Stereo Equipment)


Home Insurance No GST No PST No HST Residential Electricity and Heating (e.g., Natural Gas/Oil)

5% No PST, but subject to 0.4% ICE10 Fund levy

Yes (drops to 5%, from 5.4%, after a 7%

provincial rebate)11 Internet Access 5% 7% No (remains 12%) Repair Maintenance or Renovation Services for Real Property (e.g., Plumbing Electrical Wiring)

5%

No PST

Yes (changes to 12%)

Landscaping Lawn-Care, Private Snow Removal and House Cleaning


Computer Hardware Repair Services (e.g., adding or repairing circuit boards or other components


Computer Software Repair Services (e.g., virus removal or software installation)


ACCOMMODATION AND TRAVEL

GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Luggage 5% 7% No (remains 12%)

Municipal Public Transit No GST No PST No HST Hotel Rooms 5% 8% Yes (drops to 12%)12

8 - PST applies if the caterer provides a taxable service (e.g., setting up and taking down temporary gazebos, tents, and dance floors) or taxable goods that the customer keeps (e.g., flowers or decorations).

9 - Catering provided by a registered charity is exempt from HST. 10 - Innovative Clean Energy 11 - Provincial administered Residential Energy Rebate applies to provincial portion of HST and ICE Fund levy is eliminated. 12 - In certain municipalities there is an additional local hotel room tax of up to 2% for tourism marketing

46


2010


1,2010


the HST? Taxis 5% No PST Yes (changes to 12%) Camping Sites 5% No PST Yes (changes to 12%)

British Columbia Ferry System No GST No PST No HST

Domestic Air, Rail and Bus Travel Originating in British Columbia


International Air Travel to Continental United States originating in British Columbia (Other Than Day Trips)

5% No PST No (remains 5%)

International Air Travel Other Than to Continental United States originating British Columbia


International Rail, Bus or Ship Travel originating in British Columbia (Other Than Day Trips)


MOTORIZED VEHICLES GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Short Term Auto Rentals 5% 7% Plus $ 1.50

per day Passenger Vehicle Rental

Tax

Yes (rate remains at 12% but $1.50 per day tax

eliminated

Lease of a Vehicle Other Than an Alternative Fuel Vehicle of Fuel Efficient Vehicle

5% 7% to 10% Depends on previous PST treatment (remains 12%

or drops to 12%) Lease of Alternative Fuel Vehicle and Fuel Efficien Vehicle

5% 7% to 10% (Subject to a PST

reduction) 13

Depends on previous PST treatment (remains 12%

or drops to 12%) Purchase of Vehicle Other Than an Alternative Fuel Vehicle or Fuel Efficient Vehicle

5% 7% to 10% Depends on previous P5T treatment (remains 12%

or drops to 12%) Purchase of an Alternative Fuel Vehicle and Fuel Efficient Vehicle

5% 7% to 10% (subject to a

PST reduction)

Depends on previous PST treatment

(remains 12% of drops to 12%)

Child Car Seats and Booster. Seats 5% No PST No (remains 5%)14 Auto Insurance No GST No PST No HST Vehicle Parts 5% 7% No (remains 12%)

Vehicle Repair Services 5% 7% No (remains 12%)

Gil Changes 5% 7% No (remains 12%)

Tires 5% 7% No (remains 12%)

Automotive Window Repair 5% 7% No (remains 12%)

13 - Please note that purchases and leases of some new alternative fuel vehicles or new fuel efficient vehicles are subject to a partial reduction in the PST payable. For more information on the amounts of this PST reduction and who qualifies, please see Bulletin SST085 Alternative Fuel Vehicles and Fuel Efficient Vehicles, located on the Ministry of Finance's website at http://www.cra-arc.gc.ca/E/pub/gi/gi-063/gi-063-e.pdf.

14 - For further detail, refer to http://www.cra-arc.gc.ca/E/pub/gi/gi/063-e.pdf.

47


2010


1,2010


the HST? Purchase of Used Vehicle from a Non-GST Registrant (e.g., car dealer)

5% 7% to 10% Depends on previous PST treatment (remains 12%

or drops to 12%)

Purchase of Used vehicle from-ali^ff-GST Registrant (e.g., Private seller)

No GST 7% to 10% No HST (12% provincial tax applies) 15

Purchase of Boats and Non-Turbin Aricraft from a Non-GST Registrant (e.g., Private Seller)

No GST 7% No HST (12% provincial tax applies)

Boats and Non-Turbine Aircraft 5% 7% No (remains 12%)

Gasoline/Diesel 5% No PST No (remains 5%)16

VehideOil, Grease, Lubricants antifreeze


Outboard Motors 5% 7% No (remains 12%)

Motor Vehicle Parking 5% No PST Yes (changes to 12%)

HOME PURCHASES GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Niew Homes up to $525,000 5% No PST No change"17 New Homes over $525,000 5% No PST Yes18 Previously Occupied Homes No GST No PST No HST Legal fees 5% 7% No (remains 12%) Real Estate Commissions 5% No PST Yes (changes to 12%)

HEALTH AND BEAUTY GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Health Care Services Offered by a Medical Practitioner (e.g., Medical and Dental Services) 19


Audiologist Services Offered by a practitioner of the Service

No GST No P5T No HST

Chiropractic Services Offered by a practitioner of the Service


Physiotherapy Services Offered by a practitioner of the Service


Massage Therapy Services 5% No PST Yes (changes to 12%) Pharmacist Dispensing Fees No GST No PST No HST Over-the-Counter Medications 5% No PST Yes (changes to 12%)

15 - HST does not apply. However, British Columbia's 12% tax on private sales of boots, aircraft and vehicles will apply to provide comparable treatment to sales by dealerships.

16 - In For further detail, refer to http://www.cra-arc.gc.ca/E/Pub/gi/gi/061-e.pdf. 17 - BC will provide a rebate of 71.43% of the provincial portion of the HST, to a maximum of $26,250, for new housing purchased as a

primary residence. The rebate ensures that, on average, purchasers will pay no more provincial tax due to harmonization-that is, the will pay no more in provincial HST than is currently embedded as PST in the price of a new home. It is estimated that the embedded PST in new homes in BC is, on overage, equal to about 2% of the price.

18 - Purchasers of eligible new homes over $, are eligible for a rebate of $26,250 19 - Other than for cosmetic purposes.

48


2010


1,2010


the HST? Prescription Drugs No GST No PST No HST Some Medical Devices Including Walkers, Hearing Aids


Prescription Glasses and Contact Lenses


Feminine Hygiene Products 5% No PST No (remains 5%)20 Adult Incontinence Products No GST No PST No HST Cosmetics 5% 7% No (remain5l2%) Hair Care Products (e.g., Shampoo, Conditioner, Styling Products)


Dental Hygiene Products (e.g.. Toothpaste, Toothbrushes, Floss)


Vitamins 5% No PST Yes (changes to 12%) Pill Boxes 5% 7% No (remains 12%) Sow Dryers 5% 7% No (remains 12%) Curling Irons 5% 7% No (remains 12%) Deodorants and Deodorizers 5% 7% No (remains 12%) Nail Care Products (e.g. Nail Polish, Nail Files)


Perfume 5% 7% No (remains 12%) Shaving Supplies (e.g., Razors, Shaving Cream)


Tanning Lotion 5% 7% No (remains 12%)

MEMBERSHIPS, ENTERTAINMENT AND

SPORTS EQUIPMENT

GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Admission to Professional Sporting Events (e.g. Hockey, Football and Soccer Games)

5%

No PST

Yes (changes to 12%)

Movie Tickets 5% NO P5T Yes (changes to 12%) MUSIC Lessons No GST No PST No HST Music Instruments 5% 7% No (remains 12%) Skis and Snowboards 5% 7% No (remains 12%) Hockey Equipment 5% 7% No (remains 12%)

Steles (e.g., Hockey, Figure, Inline) 5% 7% No (remains 12%)

Safety Helmets for Sports (e.g., Hockey Helmets, Snowboard Helmets, Bike Helmets)


6o!r Clubs 5% 7% No (remains 12%)

Golf Memberships 5% No PST Yes (changes to 12%)

Driving Range Fees 5% No PST Yes (changes to 12%)

Gym and Athletic Memberships 5% No PST Yes (changes to 12%)

20 - For further detail, refer to http://www.cra-arc.gc.ca/E/Pub/gi/gi/061-e.pdf.

49


2010


1,2010


the HST? Ballet, Karate, Trampoline. Hockey. Soccer Lessons etc.

5% No PST Yes21 (changes to 12%)

Tickets for Live Theatre 5% No PST Yes22 (changes to 12%)

Swim Fins and Swimming Goggles 5% 7% No (remains 12%)

Bicycles 5% No PST Yes (changes to 12%)

Bicycle Accessories Purchased Separately


Admission to Museums and Art Galleries


Music Concerts 5% No PST Yes (changes to 12%)

Sports Equipment (e.g., Footballs, Soccer Ball, Baseball Bats, Free Standing Gymnastics Equipment)


Ski Lift Passes 5% No PST Yes (changes to 12%)

Adult Sized Ski Gloves 5% 7% No (remains 12%)

Adult Sized Ski Gloves for Children 5% No PST Yes (changes to 12%)

Children's Sized Ski Gloves 5% No PST No (remains 5%)

Ski Goggles 5% 7% No (remains 12%)

Adult Sized Ski Boots 5% 7% No (remains 12%)

Adult Sized Ski Boots for Children 5% No PST Yes (changes to 12%)

Children's Sized Ski Boots 5% No PST Yes (changes to 12%)

LEASSE AND RENTALS GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Condo Fees No GST No PST NO HST23

Long-Term Residential Accommodation


Hockey Rink and Hall Rentals 5% No PST Yes (Changes to 12%) Equipment Rentals (e.g., Carpet cleaners, power washers)


ELECTRONICS GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Televisions 5% 7% No (remains 12%)

DVD and Blu-ray Players and Accessories


Digital Cameras and Camcorders 5% 7% No (remains 12%)

21 - These items are subject to HST, although some could be exempt from HST if provided by a public service boody to children 14 and under and underprivileged individuals with a disability.

22 - Subject to HST, although some could be exempt if the maximum admission charged by a public service body to children 14 and under and underprivileged individuals with a disability.

23 - Residential condo association fees to residents are exempt; however, purchase by condominium corporation will be subject to HST, if applicable.

50


2010


1,2010


the HST? Cell Phones and Smart Phones 5% 7% No (remains 12%)

CDs, DVDs, and Blu-ray Discs 5% 7% No (remains 12%)

MP3 Players 5% 7% No (remains 12%)

Music or Video MP3s Downloaded Electronically


Video Game Consoles 5% 7% No (remains 12%)

Video Games 5% 7% No (remains 12%)

GPS Systems 5% 7% No (remains 12%)

Laptops 5% 7% No (remains 12%)

Desk Top Computers 5% 7% No (remains 12%)

Printers and Fax Machines 5% 7% No (remains 12%)

Stereos and Speakers 5% 7% No (remains 12%)

Cables, Wires, and Connector 5% 7% No (remains 12%)

Projector Screens 5% 7% No (remains 12%)

Headphones 5% 7% No (remains 12%)

Marine Electronics (e.g., Marine Radios, GPS Systems, Speakers)


PROFESSIONAL AND PERSONAL SERVICES

GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Child Care Services No GST No PST No HST

Legal Aid No GST No PST No HST Funeral Services 5% No PST Yes (changes to 12%) Coffins and Urns Purchased from Funeral Services


Fitness Trainer 5% No PST Yes (changes to 12%) Hair Stylist/Barber 5% No PST Yes (changes to 12%)

Aesthetician Services (e.g., Manicures, Pedicures, Facials)


Legal Services 5% 7% No (remains 12%)

Accounting Services 5% No PST Yes (changes to 12%)

Interior Design Services 5% No PST Yes (changes to 12%)

Wedding Planning Services 5% No PST Yes (changes to 12%)

Veterinarian Services 5% No PST Yes (changes to 12%)

Professional Printed Photographs 5% 7% No (remains 12%)

Furniture, Automotive and Marine Re-upholstery


TOBACCO GST-taxable before

PST-taxable before


51


2010


1,2010


the HST? July, 2010 July 1,2010 the HST?

Cigarettes 5% No PST Yes (changes to 12%) Cigars 5% No PST Yes (changes to 12%) Chewing Tobacco 5% No PST Yes (changes to 12%) Nicotine Replacement Products 5% No PST Yes (changes to 12%)

BANKING AND INVESTMENTS GST-taxable before

July, 2010

PST-taxable before

July 1,2010


the HST? Mortgage Interest Costs No GST No PST No HST Most Financial Services No GST No PST No HST

52

References: 1. BC budget 2012,2011,2010 http://www.bcbudget.gov.bc.ca/2010/highlights/2010_Highlights.pdf 2. BC Budget 2009 http://www.bcbudget.gov.bc.ca/2009/estimates/2009_Estimates.pdf 3. http://www.fin.gov.bc.ca/Fed_Prov_MOU_english_July23.pdf 4. Taxation and Economic Efficiency: Results from a Canadian CGE Model, par

Maximilian Baylor et Louis Beauséjour, Canadian federal Finance Minister 2004 5. Vaughn Palmer Ambitious reforms by Liberal governments to be eclipsed by HST,

Vancouver Sun, July 28th, 2009 6. from [[2][Public account of Canada]], stating at $29.9 billions the 5% GST revenue

for whole Canada for the exercise 2007/2008, and considering the contributively part of the British Columbia is of 15.4% in 2003 according to

http://www.parl.gc.ca/information/library/PRBpubs/prb0610-e.htm, , 29.9*(15.7%)= $4.6Billions not including the BC GDP growth 7. http://www2.news.gov.bc.ca/news_releases_2009-2013/2009PREM0017-000141.htm 8. Taxation and Economic Efficiency: Results from a Canadian CGE Model, par

Maximilian Baylor et Louis Beauséjour, Canadian federal Finance Minister 2004 9. http://www.fraserinstitute.org/Commerce.Web/product_files/JulAug06ffTaxCuts.pdf 10. http://www.vancouversun.com/business/good+business+business+should+tell/187258

2/story.html 11. http://www.theprovince.com/news/Revenue+neutral+levy+could+pull+200m/186476

6/story.html 12. http://www.strategicthoughts.com/record2009/HSTbase.html 13. Alberta Budget Eliminates Health-Care Premiums 14. Canada Revenue Agency 15. http://www.vancouver-real-estate-direct.com/HST/index.html) 16. http://vancouver.ca/aboutvan.htm 17. OECD, 2005 data 18. Deloitte country guide Canada tax 19. PMG Canada tax 20. http://www.Taxtips.ca 21. https://hst.blog.gov.bc.ca/wp-content/uploads/2010/05/GST_PST_HST_List_v04.pdf

53

DMC Dayarayan Management & Consulting LTD is a Canadian company which provides full company services including company registration, management, and financial services. With our head quarter in Vancouver, we can even provide Canadian bank account opening and other confidential services which protect our clients. Our Services:

Worldwide Companies Registration Bank Account Opening Annual Renewal, Accounting and Auditing etc HK Company: Services include Annual Return, Accounting and internal Auditing,

Tax return, Change of Shareholder(s) or Director(s), Company Suspension or Termination, etc.

Investment Consulting Management Consultancy Company formation(IBC , BVI) Management of offshore entities Tax Advice - Canada & International Representation, Nominee & Trustee Services Company Secretarial & Legal Services Administration & Professional Services Banking Support Services Accounting Services

CONTACT US：Dayarayan Management & CONSULTING (LTD) 809-168 Esplanade East, North Vancouver V7L 4X8 Vancouver. British Columbia. Canada Tel: 1604-9833704 Cell: 778-861-1340 Cell: 17788295504 Website: www.dayarayan.ca Email: [email protected] [email protected]

54

Dayarayans’ publication in English: 1- Canada Taxation 2012 2- Canada Taxation 2011 3- Canada Taxation 2010 4- Canada Taxation 2009 5- Doing business in Iran 6- Canada Tax Guide 2008 7- World Economy Index 2007 Find US: 1. www.dayarayan.net 2. www.dayarayan.ca/portal 3. www.dayarayan.info 4. icaew.com/index.cfm/route/156616/icaew_ga/en/Library/... 5. dayarayanmanagementconsultingltd.blogspot.com 6. www.estandardsforum.org/iran/.../international-standards-on-auditing 7. www.docstoc.com/docs/11040469/tax-guide-in-Canada 8. dayarayanmanagementconsultingltd.blogspot.com/.../canada-tax-revenue.html 9. www.iadvisory.gov.sg/upload/Doing_Business_in_Iran.pdf 10. http://www.taxtips.ca/busdir/businessconsulting/bc.htm 11. http://tarazaccounting.blogspot.com/ 12. www.worldwide-tax.com/iran/iran_tax.asp 13. http://dayarayanias.blogfa.com/ 14. http://dayarayanmanagementconsultingltd.blogspot.com/2010/03/hst-in-british-colunmbia-2010.html 15. http://dayarayanvancouver.blogspot.com/2009/11/bc-property-tax.html 16. www.linkedin.com/pub/dayarayan-auditing-dayarayan/4/a5a/782 17. finance.groups.yahoo.com/group/Daya-accountants 18. iadvisory.gov.sg/upload/Establishing_a_Joint_Stock_Compan 19. ifac.org/PAIB/relevant_links.php?sort=title&...+Standards 20. totallytax.com/.../Middle_East_Tax_Advisers 21. www.prweb.com/releases/2006/05/prweb383409.htm 22. http://www.iacpa.ir/tabid/160/articleType/ArticleView/articleId/333/Doing-Business-in-Iran.aspx 23. cnv.org/c/DATA/2/19/2010 BUSINESS LICENCES ISSUED – ALPHA 24. http://www.cnv.org/c/DATA/2/19/2010%20BUSINESS%20LICENCES%20ISSUED%20-%20ALPHABETICAL.PDF 25. www.doingbusiness.org/LocalPartners/SearchResults.aspx?economyid=91

Canada tax sumury 2012

Business

Transcript of Canada tax sumury 2012